Should You Retain Hologic Stock in Your Portfolio Now?

Hologic, Inc.’s HOLX robust strength in the Molecular Diagnostics business is poised to drive growth in the upcoming quarters. Solid demand for breast imaging solutions aids the Breast Health division’s growth, with the company’s new buyout further diversifying the business. On top of that, broad-based performance in the international markets is highly promising for the stock. Meanwhile, the uncertain macroeconomic volatilities as well as adverse currency fluctuations can dent Hologic’s operations.In the past year, this Zacks Rank #3 (Hold) stock has risen 6.8% compared with the 19.9% growth of the industry and a 32.9% rise in the S&P 500.The renowned medical device company has a market capitalization of $18.39 billion. Hologic surpassed earnings estimates in all the trailing four quarters, delivering an average surprise of 3.07%.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Factors at PlayMolecular Diagnostics Growth Continues: The molecular diagnostics segment has been a key driver for the division, contributing 13.2% (excluding COVID-19 sales) to the revenues in the fiscal fourth quarter of 2024. The impressive growth continues to be led by the BV/CV/TV assay and Biotheranostics business, offering significant growth potential.Additionally, the respiratory COVID/Flu A/B/RSV assay contributed to the quarter’s performance. The company’s expanded global installed base of Panther instruments, which now surpassed 3,300 installations, represents the catalyst for the division's sustained growth. On top of this, the BV/CV/TV assay has grown to become the second largest worldwide due to its robust underlying strength.Strength in Breast Health: The business is thriving in the burgeoning spaces of radiology, breast surgery, pathology and treatment, with key profitable offerings such as 3D digital mammography systems, image analytics software utilizing artificial intelligence, ultrasound imaging and minimally invasive breast biopsy guidance systems.Image Source: Zacks Investment ResearchIn the fourth quarter of fiscal 2024, revenues increased 5.3% (excluding the divested SSI business and Endomagnetics), driven by increased breast imaging service revenues and contributions from the gantry business and interventional products.The Breast Health business has become more diversified, with the Endomagnetics suite of products, including Magseed markers, Magtrace lymphatic tracers and Sentimag. In addition, the company has collaborated with Bayer to deliver a coordinated solution for contrast-enhanced mammography, leveraging Hologic’s leading mammography technologies.Focus on International Operations: Many of Hologic’s best-in-class products, such as ThinPrep Pap, 2D and 3D mammo tests, as well as NovaSure and MyoSure procedures, hold a disproportionately low market share overseas while commanding a leading share in the domestic market. International sales have been a major catalyst for the company in the past few years, growing 5.4% year over year in the fourth quarter of fiscal 2024.The Surgical business is driving strong, broad-based performance by expanding access to technologies into new global markets. Additionally, Hologic is expanding the Panther Fusion system’s global reach to meet the need for high-throughput molecular diagnostic respiratory testing and laying the groundwork to build an additional menu on the platform.Factors Affecting HologicMacroeconomic Concerns: The effect of the worldwide political and social uncertainty, including the impact on trade regulations and tariffs, economic disruptions, as well as ongoing supply chain constraints, have reportedly hampered the costs and sales of Hologic’s products in certain countries in recent times.These uncertainties surrounding global economic conditions and financial markets may cause medical equipment purchasers to decrease their medical health insurance premiums and procurement activities.High unemployment and health expenses may lead cost-conscious consumers to visit physicians less, adversely affecting the demand for the company’s products and procedures.Foreign Exchange Headwinds: We remain worried about the significant challenges Hologic faced owing to unfavorable foreign currency impact that has been affecting the company’s overall performance in the past few quarters. The company’s international sales are often denominated in foreign currencies, including the Euro, U.K. Pound and Renminbi. Changes in currency exchange rates, particularly the increase in the value of the dollar against any such foreign currencies, may reduce the reported value of Hologic’s revenues outside the U.S. and associated cash flows.HOLX Stock Estimate TrendIn the past 30 days, the Zacks Consensus Estimate for Hologic’s fiscal 2025 earnings has moved south to $4.32 from $4.37.The Zacks Consensus Estimate for HOLX’s fiscal 2024 revenues is pegged at $4.18 billion, suggesting a 3.7% rise from the year-ago reported number.Key MedTech PicksSome better-ranked stocks in the broader medical space are Haemonetics HAE, Boston Scientific BSX and Penumbra PEN.Haemonetics has an earnings yield of 3.39% compared to the industry’s 1.55% yield. Haemonetics’ earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed on one occasion, the average surprise being 2.82%. Its shares have risen 1.8% compared with the industry’s 23.1% growth in the past year.HAE carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Boston Scientific, carrying a Zacks Rank #2 at present, has a long-term estimated earnings growth rate of 13.8%. Shares of the company have surged 60.2% compared with the industry’s 23.1% growth. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.29%.Penumbra, carrying a Zacks Rank #2 at present, has an estimated earnings growth rate of 33.4% for 2024 compared with the industry’s 15.9%. Shares of Penumbra have risen 4.4% compared with the industry’s 20% growth over the past year. PEN’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 10.54%.Must-See: Solar Stocks Poised to SkyrocketThe solar industry stands to bounce back as tech companies and the economy transition away from fossil fuels to power the AI boom.Trillions of dollars will be invested in clean energy over the coming years – and analysts predict solar will account for 80% of the renewable energy expansion. This creates an outsized opportunity to profit in the near-term and for years to come. But you have to pick the right stocks to get into.Discover Zacks’ hottest solar stock recommendation FREE.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Boston Scientific Corporation (BSX): Free Stock Analysis Report Hologic, Inc. (HOLX): Free Stock Analysis Report Haemonetics Corporation (HAE): Free Stock Analysis Report Penumbra, Inc. 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