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Hologic (HOLX) to Report Q1 Earnings: What's in the Cards?

Zacks Equity Research
·5-min read

Hologic, Inc. HOLX is slated to report first-quarter fiscal 2022 results on Feb 2, after the closing bell.

In the last-reported quarter, the company’s earnings of $1.61 per share lagged the Zacks Consensus Estimate by 64.3%. Its earnings surpassed the consensus estimate in three of the last four quarters and missed the same in one, the average surprise being 29.15%.

Let’s see how things are shaping prior to the announcement.

Factors at Play

Diagnostics

Like the last-reported quarter, the company expects global Molecular Diagnostics revenues for the fiscal first quarter to reflect the benefits of additional tests onto Hologic’s Panther-installed base. The company’s Panther and Panther Fusion instruments have likely maintained momentum on continued adoption, thus contributing to the top line.

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We also expect Hologic’s diagnostics business to have witnessed robust growth in the fiscal first quarter, banking on increased COVID-19 testing demand. In line with this, in November 2021, the company confirmed that its three SARS-CoV-2 tests detect the recently-emerged Omicron variant of the coronavirus. This development is expected to have boosted Hologic’s diagnostics revenues in the fiscal first quarter.

In the same month, Hologic launched the Novodiag system for on-demand molecular testing in Europe. The addition of the Novodiag system to the company’s diagnostic molecular scalable solutions portfolio will provide more customers in Europe with a broader range of solutions. This is expected to have witnessed strong market adoption in the fiscal first quarter by banking on the surge in coronavirus cases induced by the Omicron variant, thus adding to the top line.

In October 2021, the company’s Aptima SARS-CoV-2/Flu Assay was made available for the simultaneous detection and differentiation of three respiratory viruses — SARS-CoV-2, influenza A and influenza B. With the potential for seasonal flu in addition to the ongoing COVID-19 pandemic, these assays are likely to have witnessed high market acceptance through the fiscal first quarter, banking on a surge in new variant cases, thus boosting revenues.

Breast Health

Hologic has been making impressive progress in its Breast Health arm over the past few months despite the pandemic-led challenging business climate. We are optimistic about an improved sequential performance by the segment during the fiscal first quarter, given the company’s ongoing efforts to diversify the business across the patient continuum of care.

Hologic, Inc. Price and EPS Surprise

Hologic, Inc. Price and EPS Surprise
Hologic, Inc. Price and EPS Surprise

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

Recently, the company strengthened the interventional franchise by relaunching Brevera and buying Somatex — a long-time partner and leading developer of breast cancer markers. In November 2021, the company launched Genius Digital Diagnostics System for cervical cancer screening in Europe. These developments are expected to have contributed to the company’s Breast Health business in the to-be-reported quarter.

GYN Surgical

Similar to the last-reported quarter, Hologic’s GYN Surgical business arm is expected to have registered strong growth in the first quarter on robust adoption of its ProVu laparoscopic radio frequency ablation system (used for the treatment of uterine fibroids), along with new hysteroscopes and Acessa's laparoscopic radio frequency ablation system. Further, the quarterly performance is expected to have been boosted by the European launch of its CE-marked Fluent fluid management system in January 2021.

In November 2021, Hologic acquired Bolder Surgical. The acquisition will add laparoscopic vessel sealing, dividing and dissecting devices to Hologic’s portfolio and allow it to expand the use of Bolder Surgical’s devices to OB/GYN specialists. We expect this major development to have contributed significantly to the company’s first-quarter revenues.

The Estimate Picture

The Zacks Consensus Estimate for total fiscal first-quarter revenues of $1.12 billion suggests a decline of 30.47% from the prior-year quarter’s figure.

The consensus estimate for earnings per share is pegged at $1.21, indicating a decline of 57.69% from the year-ago reported figure.

What Our Model Suggests

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 higher chances of beating estimates. However, this is not the case here as you can see:

Earnings ESP: Hologic has an Earnings ESP of -1.65%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #2.

Stocks With Favorable Combinations

Here are a few medical stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.

AMN Healthcare Services, Inc. AMN has an Earnings ESP of +10.29% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

AMN Healthcare’s long-term earnings growth rate is estimated at 16.2%. AMN’s earnings yield of 6.9% compares favorably with the industry’s 1.1%.

Henry Schein, Inc. HSIC has an Earnings ESP of +2.62% and a Zacks Rank of 2.

Henry Schein’s long-term earnings growth rate is estimated at 11.8%. HSIC's earnings yield of 6.4% compares favorably with the industry’s 4.4%.

Laboratory Corporation of America Holdings LH or LabCorp has an Earnings ESP of +9.21% and a Zacks Rank #1.

LabCorp long-term earnings growth rate is estimated at 10.6%. LH's earnings yield of 6.9% compares favorably with the industry’s 4.4%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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Laboratory Corporation of America Holdings (LH) : Free Stock Analysis Report

Hologic, Inc. (HOLX) : Free Stock Analysis Report

Henry Schein, Inc. (HSIC) : Free Stock Analysis Report

AMN Healthcare Services Inc (AMN) : Free Stock Analysis Report

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