Hologic Climbs 13% in a Month: How Should You Play the Stock?

After lagging for months, Hologic HOLX has picked up momentum in recent weeks. Shares of the Marlborough, MA-based company have climbed 13.3% over the past month, higher than the industry and the broader Medical sector’s gains of 2.4% and 3.4%, respectively. The current price is now 23.9% above the 52-week low of $51.90, boosted in part by reports that Hologic declined a private takeover bid from TPG and Blackstone.HOLX has also managed to outperform two of its key competitors — Exact Sciences EXAS and Becton, Dickinson and Company BDX, or BD, in the same time frame.Hologic One-month PerformanceImage Source: Zacks Investment ResearchInvestor sentiment was already subdued after the release of the company’s fiscal 2025 second-quarter earnings in early May. Hologic met adjusted EPS expectations with a modest revenue beat but revised its annual outlook due to the growing tariff impact from China and Costa Rica, funding cuts affecting the Africa business, and a soft capital equipment market. In contrast, Exact Sciences anticipates “little to no tariff impact” due to all domestic operations, while BD expects $90 million in tariff expenses for fiscal 2025, mostly from China imports.That said, let’s explore what might be driving Hologic’s recent rally.Hologic Declines Private BidOn May 27, HOLX shares rose nearly 15% following a report from the Financial Times that the company turned down a non-binding offer from private equity (PE) firms TPG and Blackstone. The deal was valued at up to $16.7 billion, including debt. These firms, known for their solid history of healthcare investments, teamed up last year to explore a potential acquisition of Bausch + Lomb, which eventually did not happen. The proposed takeover bid of Hologic would have been one of the largest leveraged buyouts of the year, valuing the company’s shares between $70 and $72 — roughly a 30% premium to the May 23 closing price of $54.28. The report also stated that there is a possibility the deal discussions might resume, according to people with knowledge of the matter. Hologic has attracted buyers’ attention for a while now. Of late, the take-private activities by PE firms have seen a sharp increase, such as Sycamore Partners’ $24 billion deal for Walgreens Boots Alliance, Thoma Bravo’s $10.6 billion acquisition of Boeing’s software unit, and 3G Capital’s $10.5 billion deal for Skechers. Nonetheless, the high premium in the offer signals strong confidence in Hologic’s growth potential.New Positive Data on BCI Test Boosts HologicThe company presented new data showing the significant clinical impact of the Breast Cancer Index (“BCI”) test at the 2025 American Society of Clinical Oncology Annual Meeting held on June 2. The molecular, gene expression-based test from Hologic’s subsidiary, Biotheranostics, has been a key growth driver in the molecular diagnostics business over the past few quarters. The latest data from the prospective, multi-center BCI Registry Study highlights how this genomic test plays a critical role in guiding extended endocrine therapy decisions for women with early-stage, hormone receptor-positive (HR+) breast cancer.With more than 2,800 patients involved, the study found that BCI testing led to a change in treatment recommendations for about four in 10 cases. Additionally, physicians’ confidence in their treatment recommendations got a boost, while patients felt comfortable in their decisions, citing fewer concerns about cost, drug safety and preference related to extended endocrine therapy benefits.HOLX Stock ValuationHologic looks attractive from a valuation standpoint. The stock has been trading at a price-to-sales (P/S) of 3.40X over the past five years compared to its median of 4.33X and the industry average of 4.16X. It has a Value Score of B at present.Hologic 5 Year-P/S RatioImage Source: Zacks Investment ResearchMeanwhile, both Exact Sciences and BD are trading at a premium to their industry average, with P/S of 3.16X and 2.20X respectively.Hologic’s Long-Term Prospects in BriefMolecular Diagnostics assays are likely to continue to be the principal revenue-generating component in the Diagnostics division. As Hologic drives awareness and reimbursement in the highly unpenetrated U.S. vaginitis market, the BV CV/TV assay is poised to see a strong uptake. Aligning with its long-term revenue diversification strategy, the company’s Breast Health service revenues are now larger and growing more steadily than the gantry business. The 2024 acquisition of Endomagnetics boosted the Interventional Breast portfolio with market-leading product lines and strong R&D capabilities for further portfolio expansion. The upcoming launch of innovations like the Envision Mammography Platform is likely to gain a favorable reception.In Surgical, Myosure’s strong international growth points to the high demand for minimally invasive options for treating uterine polyps and fibroids. Hologic continues to expand this division both organically and through acquisitions such as Gynsesonics, leveraging its established sales channel. Further, the company is building capabilities to grow internationally on a consistent basis by going directly into more geographies and businesses. A consistently strong profitability has contributed to a fortress balance sheet over time, allowing Hologic to execute on both tuck-in M&A and share repurchases. HOLX Price TargetBased on short-term price targets offered by 15 analysts, the Zacks average price target is $68.13 per share. The average suggests a potential 8.02% upside from last Friday’s closing price.Image Source: Zacks Investment ResearchShould You Invest in HOLX Stock?Hologic has some promising catalysts for long-term expansion, supported by an attractive valuation relative to its industry. However, despite outperforming peers over the past month, the Zacks Rank #3 (Hold) stock is navigating a turbulent macroeconomic landscape, which is expected to weigh on its financial performance in the near term. Hence, those eyeing HOLX may find it wise to wait for a better entry point, while current shareholders should retain their position. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.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 Becton, Dickinson and Company (BDX): Free Stock Analysis Report Hologic, Inc. (HOLX): Free Stock Analysis Report Exact Sciences Corporation (EXAS): 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