Hologic, Inc.
’s
HOLX
diagnostics business is likely to have witnessed a robust performance in the fiscal third quarter, banking on growing Panther instruments worldwide. The Breast Health arm is expected to show signs of recovery amid the ongoing chips shortage, backed by its efforts to expand the business and increase awareness about women’s health.
We anticipate the company’s third-quarter fiscal 2022 results, scheduled for release on Jul 27 after the closing bell, to reflect these attributes duly.
Click
here
to know what the company’s overall fiscal third-quarter performance is expected to be.
Diagnostics
Hologic’s Molecular Diagnostics sales for the fiscal third quarter will likely reflect the benefits of additional tests on the Panther system. In May 2022, the company extended its transplant pathogen monitoring menu on the Panther Fusion system with the receipt of the CE marking for the Panther Fusion EBV Quant Assay and Panther Fusion BKV Quant Assay. The same month, the company gained FDA approval for its Aptima CMV Quant assay to quantify the viral load of cytomegalovirus (CMV) in patients having solid organ or stem cell transplants. The test has been launched in the U.S. for post-transplant pathogen detection and monitoring on Hologic’s fully automated Panther system. Added to this, the company placed an additional 123 Panther instruments in the last-reported fiscal second quarter. The current Panther installed base stood at more than 3,100 instruments worldwide. We expect these developments to have contributed significantly to the company’s top line in the fiscal third quarter.
During the fiscal second-quarter earnings update, Hologic noted that the contributions from its acquired Biotheranostics and Diagenode businesses would be included in the organic growth of the diagnostics division, beginning in Q3. In the last reported quarter, Biotheranostics delivered an impressive $16.4 million revenues. Recently, the Biotheranostics BCI test became the only genomic test in NCCN and ASCO guidelines for determining the value of extended endocrine therapy. We expect the Biotheranostics integration to have benefited Hologic’s top-line growth in the to-be-reported quarter while subsequently enabling the company to enter the lab-based oncology market.
Within the diagnostics arm, Hologic is also likely to gain from the vaginitis panel, BV CVTV, due to the growing prevalence and awareness of vaginitis infection across the globe. The BV CVTV assay identifies the most common causes of infectious vaginitis and generated nearly $7 million in sales for the fiscal second quarter.
Breast Health
Despite being faced with supply chain headwinds related to the semiconductor chip shortage, Hologic is leaving no stone unturned to address the robust underlying demand for its breast health products. We are optimistic about an improvement in sequential performance by the segment during the fiscal third quarter on a robust product portfolio and increasing backlog growth. As the economies around the world return to normalcy, we anticipate a rebound in breast screenings to significantly contribute to the segment’s upcoming results.
Last March, the company also opened an Innovation Center in Aix-en-Provence, France, to support its ultrasound, interventional and surgical solutions across the continuum of breast health care. In addition, in recent times, Hologic has undertaken several marketing initiatives to raise awareness for women’s health, including its Super Bowl and Olympic commercials. The company is engaged in a landmark title sponsorship of the Women’s Tennis Association tour to emphasize the importance of preventive care through well-woman visits. All these developments are expected to strongly contribute to the company’s breast health business revenue result in the to-be-reported quarter.
What Our Model Suggests
Per our proven model, a stock with the combination of a positive
Earnings ESP
and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has higher chances of beating estimates. However, this is not the case, as you can see:
Earnings ESP:
Hologic has an Earnings ESP of 0.00%. 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 #3.
Stocks to Consider
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:
Merck & Co., Inc.
MRK
has an Earnings ESP of +7.18% and a Zacks Rank of #2. The company will release second-quarter 2022 results on Jul 28. You can see
the complete list of today’s Zacks #1 Rank stocks here.
Merck has a long-term earnings growth rate of 10.1%. MRK’s earnings yield of 7.92% compares with the industry’s 7.88%.
Alcon Inc.
ALC
has an Earnings ESP of +5.07% and a Zacks Rank of #2. Alcon is expected to release second-quarter 2022 results on Aug 16.
Alcon long-term earnings growth rate is estimated at 14.3%. ALC’s earnings yield of 3.44% compares with the industry’s (8.53%).
BrainsWay Ltd.
BWAY
currently has an Earnings ESP of +33.33% and a Zacks Rank of #1. BrainsWay is expected to release second-quarter fiscal 2022 results on Aug 10.
BWAY’s 2023 earnings growth rate is estimated to be 16.7%.
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