Hologic (NASDAQ: HOLX) has been gaining from new strategic product launches across Diagnostics and Breast Health. However, macroeconomic issues and unfavorable FX headwinds continue to impede growth. The stock carries a Zacks Rank #3 (Hold) currently.
Major Factors Driving HOLX Stock Growth
Among Hologic's advanced diagnostic products, primary revenue-generating ones are molecular diagnostic assays, which run on advanced instrumentation systems (Panther, Panther Fusion and Tigris), ThinPrep cytology system and the Rapid Fetal Fibronectin Test. With solid 10.5% growth, excluding COVID-19 sales in the fiscal third quarter of 2024, the Molecular Diagnostics business has consistently maintained high-single to double-digit gains in 13 of the last 15 quarters. Growth continues to be driven by the ongoing adoption and utilization of the broad menu in the Panther platform.
In Breast Health, Hologic expanded its product offering from imaging to cover the continuum of breast cancer care, including biopsy and surgery. The business is thriving primarily 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. In the third quarter of fiscal 2024, revenues increased 7.1% (excluding the divested SSI business), driven by domestic and international growth of 7.2% and 12.1%, respectively.
The company's international sales have been a major catalyst in the past few years, growing 5.1% year over year in the third quarter of fiscal 2024. Molecular STI testing, cytology and MyoSure experienced strong growth in the global markets. However, the company perceives it as still in the early phase of utilizing its expanded Panther installed base. Similarly, while international cytology and STI testing have more dominant U.S. revenues, they are expected to become meaningful revenue drivers in the international markets with time.
In order to streamline its operations and reduce the cost of revenues, Hologic has adopted a few significant strategies over the past few years. The company has ...
