Countdown to Hologic (HOLX) Q1 Earnings: A Look at Estimates Beyond Revenue and EPS

With Hologic, Inc. HOLX gearing up to release its fiscal 2025 first-quarter financial results on Feb. 5 after the market closes, the company’s Breast Health segment is expected to have benefited from gantry and imaging service businesses and the expanding interventional portfolio. The Diagnostics division is expected to have gained from the strong Molecular Diagnostics momentum. Additionally, international sales may have bolstered the GYN Surgical segment’s performance.

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Wondering if this stock is a good pick before earnings? Our analysis can help you out.

HOLX’s Segments in Detail

Breast Health

The segment generates a bulk of service revenues from the service contracts related to the digital mammography portfolio. In the first quarter of fiscal 2025, robust breast imaging service revenues are expected to have bolstered the performance. Hologic’s gantry business, which experienced elevated growth in the past two fiscal years due to global chip shortage recovery, is expected to stabilize in fiscal 2025, ahead of the next-generation gantry launch. There may have been higher sales volumes of digital mammography systems, primarily 3Dimensions systems, and related workstation and workflow products in the first quarter, boosting HOLX’s overall revenues.

The breast interventional business may have continued to benefit from solid demand for Hologic’s portfolio of disposable needles and markers. The acquisition of Endomagnetics has added wire-free breast surgery localization and lymphatic tracing solutions, including the Magseed marker, the Magtrace lymphatic tracer and the Sentimag platform, further enhancing the breast surgery portfolio and increasing recurring revenue opportunities.

Our model projects a 3.9% increase in Hologic’s Breast Health segment revenues for the first quarter of fiscal 2025.

Diagnostics

The molecular diagnostics business has been a consistent growth driver in this division, powered by an installed base of more than 3,300 high-throughput Panther systems worldwide. The systems continue to drive demand for their superior workflow, automation, ease of use and ongoing menu expansion, giving Hologic a competitive edge in the industry. In the first quarter of fiscal 2025, Molecular performance is expected to be led by the ongoing adoption of the BV/CV/TV assay on Panther.

Hologic, Inc. Price and EPS Surprise

Hologic, Inc. price-eps-surprise | Hologic, Inc. Quote

The company may have continued to witness accretive growth from the biotheranostics business due to the expanding use and coverage of the breast cancer index (BCI) test. Amid the ongoing respiratory season, we assume the division’s 4-plex, COVID/Flu A/B/RSV assay also favored the growth. In the cytology and perinatal business, Hologic’s AI-powered Genius Digital Diagnostic System has been highly praised by early adopters for its enhanced sensitive disease detection and streamlined efficiency. With the system now live for U.S. customers, this is expected to have boosted the revenues as well in the to-be-reported quarter.

According to our model forecast, Diagnostics revenues are likely to increase 1.7% year over year in the first quarter of fiscal 2025.

GYN Surgical

We expect the segment’s performance to be driven by robust sales of MyoSure devices and related Fluent fluid management products. The international Surgical business is likely to have contributed to Hologic’s first-quarter revenues by expanding access to technologies in more new markets. While the legacy NovaSure business may have registered lower domestic sales, the same internationally is expected to have been strong, particularly in Western Europe. Myosure’s overseas growth is likely to have surpassed its U.S. growth, driven by underpenetrated markets and rising demand for minimally invasive options for the treatment of uterine polyps and fibroids.

Our model projects GYN Surgical revenues to increase 1.4% in the first quarter of fiscal 2025 from the comparable 2024 period.

Earnings Whispers for HOLX

Per our proven model, stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, have a higher chance of beating estimates, which is not the case here:

Earnings ESP: Hologic has an Earnings ESP of -0.13%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Hologic currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Top MedTech Picks

Here are some medical stocks worth considering, as these have the right combination of elements to post an earnings beat this time:

Masimo MASI has an Earnings ESP of +4.05% and a Zacks Rank #1. The company is set to release fourth-quarter 2024 results on Feb. 25.

MASI’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 17.10%. The Zacks Consensus Estimate for the company’s fourth-quarter EPS is expected to increase 14.4% from the year-ago quarter figure.

Merit Medical Systems MMSI has an Earnings ESP of +3.03% and a Zacks Rank #2. The company is slated to release fourth-quarter 2024 results on Feb. 25.

MMSI’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 6.42%. The Zacks Consensus Estimate for Merit Medical’s fourth-quarter EPS is expected to increase 2.47% from the year-ago quarter figure.

Cencora COR has an Earnings ESP of +0.71% and a Zacks Rank #2. The company is set to release first-quarter fiscal 2025 results on Feb. 2.

The company’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 2.45%. The Zacks Consensus Estimate for COR’s first-quarter EPS is expected to increase 7% from the year-ago reported figure.

Zacks Investment Research

Hologic has an average rating of overweight and mean price target of $85.88, according to analysts polled by FactSet.

Hologic HOLX is set to release first-quarter fiscal 2025 results on Feb. 5 after the closing bell.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

The Zacks Consensus Estimate for first-quarter earnings suggests a 3.1% increase year over year to $1.01 per share. The estimate has remained stable in the past 30 days. The Zacks Consensus Estimate for first-quarter revenues currently stands at $1.03 billion, a 1.4% improvement compared to the last year.

In the last four quarters, Hologic surpassed the consensus mark three times and missed once, the average surprise being 3.07%.

Q1 Earnings Whispers for HOLX

Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, has a higher chance of beating estimates, which is not the case here.

Earnings ESP: Hologic has an Earnings ESP of -0.13%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks Rank #1 stocks here.

Factors Shaping Hologic’s Q1 Results

In the first quarter of fiscal 2025, Hologic is likely to have faced a few transitory challenges, including the pause of the Horizon DXA shipments in the Skeletal Health division. Although the company has been actively working with suppliers to resolve the issue, revenues are expected to have been affected in the first quarter. Our model forecast indicates a 43.3% year-over-year decline in business sales.

Additionally, recent hurricanes may have a residual impact, including the saline IV fluid shortage, which is likely to have impacted Hologic’s elective breast and surgical procedures. Nonetheless, we expect each of the company’s three core franchises to have performed well despite strong prior-year comparisons.

The Breast Health segment is likely to have benefited from robust service contract revenues from an expanded installed base. Interventional products like the portfolio of disposable needles and markers may have boosted the performance. Endomagnetics is likely to have helped Hologic thrive in the expanding interventional breast surgery market. The gantry business may have contributed meaningfully as well to the overall revenues.

Our model forecast indicates 3.9% year-over-year growth in Breast Health revenues in the first quarter of fiscal 2025.

The performance of the Diagnostics segment is expected to be led by the core Molecular Diagnostics business, mainly driven by the ongoing adoption of the BV/CV/TV assay on the Panther system. The biotheranostics business is likely to continue to post accretive growth through robust adoption and expanded coverage for the breast cancer index (BCI) test. A major milestone in the fiscal fourth quarter was the first U.S. customers going live with the Genius Digital Diagnostics system, or AI-assisted Pap test. We expect this to have boosted the cytology and perinatal revenues in the to-be-reported quarter.

Going by our model, the Diagnostics segment’s revenues are likely to increase 1.7% from the comparable fiscal 2024 figure.

On the Surgical side, growth is expected to be led by the core MyoSure and the platform's complementary fluent fluid management system. Hologic’s international business performance may have continued to remain broad-based, driven by the efforts to expand access to its technologies into more new markets.

Our model estimates a 1.4% improvement in this business in the fiscal first quarter.

Hologic’s Long-Term Prospects

In fiscal 2025, Hologic remains confident about its durable revenue base, diverse growth drivers and opportunities to strengthen its product pipeline through both organic growth and strategic acquisitions. The company continues to capitalize on the success of market-leading products such as the Panther, ThinPrep liquid-based Pap test, 3D mammography and NovaSure, which have set standards in their respective fields. Building on this foundation, Hologic is expanding the global footprint of the Panther Fusion system to meet the growing need for high throughput molecular diagnostic respiratory testing. At the same time, it is laying the groundwork to build more menus on the platform.

In Breast Health, the company is unveiling innovations that incorporate the latest advances in AI and workflow features. The upcoming U.S. launch of the Genius AI Detection PRO solution is expected to deliver greater accuracy and efficiency over its predecessor, Genius AI Detection 2.0. The addition of Endomagnetics strengthens its interventional breast care portfolio with distinct products such as the Magseed marker, Magtrace for lymphatic tracer and the Sentimag platform. Meanwhile, anticipation builds for the next-generation gantry launch, bringing enhancements to workflow, patient experience and image quality.

When it comes to the M&A strategy, Hologic pursues tuck-in deals that align with the three franchises, drive top-line growth and add accretion to earnings over time. The recent acquisition of Gynesonics brings their flagship Sonata System, broadening the range of minimally invasive solutions within the GYN Surgical portfolio. Backed by a strong balance sheet and consistent cash flow generation, the company is well-positioned to fund innovation and pursue both tuck-in M&A and share repurchases through its capital allocation strategy.

Hologic’s international business remains largely untapped, offering substantial growth opportunities across all its testing categories. Myosure capitalizes on being the sole minimally invasive alternative to a complete hysterectomy in many of the underpenetrated markets, fueling higher growth overseas than in the United States. Overall, the company is poised to capture more emerging market growth opportunities, leveraging its strong brand reputation and innovative offerings.

HOLX Stock Price Performance

In the past 30 days, Hologic shares have risen modestly by 0.6% compared with the industry’s 7.7% growth and the broader Zacks Medical sector’s 3.3% rise. The S&P 500 Composite has gained 3.4% in the same time frame.

In contrast, peers GE Healthcare GEHC and Becton, Dickinson and Company BDX have comparatively fared better.

HOLX One-Month Price Comparison

HOLX Trading Cheap

At a forward 12-month Price/Earnings (P/E) of 16.57X, Hologic shares are trading at a discount than the industry average of 33.65X. The stock is graded a Value Score of B at present.

P/E Ratio Forward Twelve Months (F12M)

Conclusion: Hold HOLX Stock

Hologic’s core franchises are expected to drive impressive top and bottom-line results in the first quarter of fiscal 2025. With its innovative offerings and international expansion efforts, the company is poised for significant long-term growth. Existing investors may find holding the stock more prudent to reap future benefits. However, those eyeing the stock may want to wait for a better entry point as the company works through its divisional hurdles.

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