Here's Why You Must Add Hologic (HOLX) To Your Portfolio Now

Hologic Inc. (NASDAQ:HOLX) has been on a healthy growth trajectory of late. The company’s progress in the domestic and international markets, a strong pipeline of products as well as huge future prospects of the GYN Surgical and Molecular Diagnostics segments make it an attractive pick at the moment. Therefore this Zacks Rank #2 (Buy) stock boasts solid prospects to drive its shares higher in the near term.

The stock has a market cap of $11.01 billion. The company’s expected growth rate for 2018 is 11.6%.

The company has an average positive earnings surprise of 6.3% for the last four quarters. Also, it has a long-term expected earnings growth rate of 9.8%.

The company’s estimate revision trend for the current year has been positive. In the past couple of months, 12 analysts moved north with no southbound estimates witnessed. Earnings estimates have been raised around 6.1% to $2.25 per share over the same time frame.

Let’s find out whether the recent favorable trend is a sustainable one.

Hologic’s first-quarter fiscal 2018 performance was quite promising, primarily on the strength of Molecular Diagnostics. Headquartered in Bedford, MA, the company’s global growth was driven by an increasing market share and utilization of fully automated Panther system along with a continued solid uptake of Aptima women's health products. Notably, Aptima women’s health assays are dominant in the testing labs for detecting chlamydia, gonorrhea, HPV (Human papillomavirus) and trichomonas.

However, performance within the GYN Surgical space was disappointing in the reported quarter, majorly due to external factors. Moreover, four extra selling days in the prior-year period left a significantly adverse effect on the year-over-year comparison. Situation also grew tougher in the quarter under review as the company registered a windfall gain in the year-ago quarter from the recall of a competitive product.

Accordingly, Hologic has underperformed the broader industry over the last three months. The stock has lost 1.6% against the broader industry’s 6.1% rise.

Nonetheless, Hologic’s GYN Surgical business shows huge future prospects. In fact we are upbeat about the recent commercial launch of MyoSure MANUAL device in the United States. In addition to the same, the MyoSure products portfolio consists of MyoSure, MyoSure REACH, MyoSure XL and MyoSure LITE devices.

While MyoSure continues to show solid growth, the company pursues a string of developmental strategies in the Surgical space. Notably, Hologic had appointed new leadership about six months ago with the team having upgraded sales talent, structure and growth-boosting incentives.

Other Key Picks

Some other top-ranked stocks in the broader medical space are athenahealth Inc. (NASDAQ:ATHN) , Express Scripts Holding Company (NASDAQ:ESRX) and Bioverativ Inc. (NASDAQ:BIVV) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

athenahealth has an expected long-term growth rate of 20.7%. In the past three months, the stock has gained 8%.

Express Scripts has a projected long-term growth rate of 10%. In the past six months, the stock has returned 25.9%.

Bioverativ has an expected long-term growth rate of 14%. In the past six months, the stock has returned 85.5%.

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