Pre Q3 Earnings: Is Hologic (HOLX) Stock a Portfolio Must-Have?

Investment Thesis - Hologic's future growth prospects are supported by a strong product portfolio, particularly in Molecular Diagnostics, with significant contributions from BV and CV/TV assays and the Biotheranostics business [4] - Key GYN Surgical products, including Myosure, Fluent, and NovaSure, are driving growth, with the Breast Health segment showing over 25% growth in fiscal 2023, bolstered by a $310 million deal with Endomagnetics Ltd [5] - The company's financial strength enables regular share repurchases and growth-focused investments, leading to increased brand awareness and market share gains [6] Conclusion - Hologic is positioned for long-term growth through its diverse core businesses and strong financial flexibility, which supports acquisitions and share buybacks [7] - The company has a consistent track record of exceeding earnings forecasts, with an average surprise of 4.94% over the last four quarters [11] Upcoming Earnings - Hologic is set to release its fiscal 2024 third-quarter results on July 29, with expected earnings growth of 9.7% to $1.02 per share and a revenue increase of 1.7% to $1 billion [10] - The broad menu of molecular diagnostics tests is anticipated to drive top-line performance, with a projected 6.4% year-over-year growth in Molecular Diagnostics revenues [13] Segment Performance - The Breast Health franchise is expected to see a 3.4% year-over-year improvement in revenues, driven by strong performance in gantry and service businesses [16] - The GYN Surgical segment may experience a 7.1% revenue increase, supported by robust sales of MyoSure devices and Fluent products [17] Financial Metrics - Hologic's stock is currently trading at a P/E ratio of 17.99X forward 12 months earnings, significantly lower than the industry average of 32.42X [22] - Year-to-date, Hologic shares have increased by 9.8%, outperforming the industry growth of 4.3% [20]