Buy, Hold or Sell Hologic Stock? Key Insights Ahead of Q4 Earnings

Hologic HOLX is set to release fourth-quarter fiscal 2025 results on Nov. 3, after the closing bell.The Zacks Consensus Estimate for fiscal fourth-quarter earnings per share (EPS) suggests an 8.9% increase year over year to $1.10. The estimate has remained stable in the past 60 days. The Zacks Consensus Estimate for fiscal fourth-quarter revenues currently stands at $1.03 billion, suggesting a 4.7% increase year over year.Image Source: Zacks Investment ResearchThis Marlborough, MA-based company specializes in medical devices for diagnostics, surgery and medical imaging, with a focus on women’s health. In the trailing four quarters, Hologic’s earnings performance has been mixed, surpassing estimates three times and missing on one occasion. The average beat is 0.96%.Image Source: Zacks Investment ResearchIs a Q4 Earnings Beat Likely for Hologic?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 a higher chance of beating estimates, which is not the case here.Earnings ESP: Hologic has an Earnings ESP of -1.04%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.Zacks Rank: The company currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks Rank #1 stocks here.Factors Shaping Hologic’s Q4 PerformanceIn Diagnostics, the Molecular Diagnostics unit is expected to have driven growth, supported by continued strong uptake of the BV, CV/ TV assay. Hologic’s ongoing efforts to grow in the highly underpenetrated U.S. vaginitis market with this test likely favored the performance. The Biotheranostics oncology business may have benefited from strong adoption of the Breast Cancer Index test. Panther Fusion assays have seen strong traction this year due to the severe flu season and increased customer adoption, and the momentum is expected to have extended into the third quarter as well. Meanwhile, the global rollout of the Genius digital diagnostics system likely supported the performance of the company’s cytology and perinatal businesses.However, Diagnostics growth is likely to have been largely affected by macroeconomic headwinds, such as the funding cuts to USAID hindering its HIV testing business in Africa. China’s difficult operating environment is also expected to have weighed on cytology results. Our model forecasts Diagnostics revenues to grow by 0.9% year over year in the fourth quarter of fiscal 2025.Hologic’s Breast Health business is likely to have achieved the anticipated return to growth, following the optimistic progress reported in the fiscal third quarter. Solid execution by the new leadership team is expected to have driven the improvement, with efforts like bifurcating the sales structure between capital and disposables, a more concrete selling strategy and rolling out the new end-of-life strategy for older gantries. Further, the Interventional performance is likely to have been robust in the fourth quarter of fiscal 2025, with the inclusion of Endomagnetics in organic revenues. According to our model, Breast Health revenues are expected to show a 0.1% improvement year over year.The GYN Surgical division is likely to deliver its strongest revenue performance in the fiscal fourth quarter, supported by favorable year-over-year comparisons and improved commercial execution. The International unit may have been the key driver, led by strong performance in markets where reimbursement of its minimally invasive offerings like MyoSure and NovaSure were recently established, as well as expansion into new regions. Moreover, Gynesonics is also expected to have contributed favorably to the division’s revenues. Our model forecast for the division’s revenue shows an 11.9% year-over-year increase.As previously indicated, Hologic’s Skeletal Health division is likely to have posted outsized growth in the quarter under review, comping against a full quarter impacted by the DXA stop-ship in fiscal 2024. Our model estimates 144.8% year-over-year growth in the Skeletal business revenues.HOLX Stock Price Performance & ValuationYear to date, Hologic shares have fallen 3.2% compared with the industry’s 8.1% decline. However, the stock’s performance lags behind the Zacks Medical sector, as well as key competitors like Medtronic MDT and Boston Scientific BSX.HOLX YTD Price ComparisonImage Source: Zacks Investment ResearchBased on the forward 12-month Price/Sales (P/S), HOLX shares are trading at 3.64X, above its own median of 3.47X and the sector’s 2.30X. The stock currently sits with a Value Score of B.Hologic’s 1-year P/SImage Source: Zacks Investment ResearchHologic’s Investment ConsiderationHologic enjoys many strengths across its three core divisions, coming from both internal innovation and business development. Worldwide utilization of the fully automated Panther platform continues to reach new record highs. The new Panther FusionGastrointestinal (GI) Bacterial and Expanded Bacterial Assays, which recently secured FDA clearance and CE mark, reflect Hologic’s push to diversify the menu beyond respiratory testing. The company is also strengthening its market access capabilities around the globe. Furthermore, its innovations are taking centre stage, such as the Genius AI Detection PRO solution and the upcoming launch of the Envision Mammography Platform in Breast Health.Hologic keeps a strong focus on expense management and operational efficiency across the organisation. Its solid balance sheet and cash flows provide substantial strategic and financial flexibility, supporting capital deployment priorities such as tuck-in M&A and share repurchases.However, the company faces the impact of ongoing macroeconomic pressures, including a 10% baseline tariff on all U.S. imports. Manufacturing activities tied to Costa Rica and shipments from China are expected to add $10-$12 million in quarterly tariff costs during fiscal 2026, reducing gross margin by an estimated 100 basis points compared to this year. Further, rising tariff implications, anti-American sentiment and strong local competition for the cytology product prompted Hologic to derisk its China exposure for the back half of 2025, now expecting revenues to total around $50 million for the year.  How to Play HOLX Stock?While Hologic’s divisional drivers, international expansion opportunities and innovation agenda support its long-term prospects, short-term challenges are likely to weigh on the fiscal 2025 fourth quarter results. The Diagnostics unit, the company’s largest segment by revenue, is particularly facing most of the anticipated macroeconomic impacts, hindering its full potential growth. Coupled with sluggish YTD performance and expensive valuation, the stock raises caution, indicating it's better to steer away from investing in Hologic at the moment. #1 Semiconductor Stock to Buy (Not NVDA)The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow.One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don't build. It's just beginning to enter the spotlight, which is exactly where you want to be.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Boston Scientific Corporation (BSX): Free Stock Analysis Report Medtronic PLC (MDT): Free Stock Analysis Report Hologic, Inc. (HOLX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks