Hologic Inc HOLX

Hologic Earnings: With Covid-19 Reset Nearing Its End, Base Molecular Diagnostics Displays Strength

Hologic’s strong showing in its fiscal second quarter puts the firm on track to meet our full-year expectations, and we’re leaving our fair value estimate intact. With Hologic reaching the end stages of its reset from covid disruption, we’re pleased to see the firm’s underlying non-covid business maintain its recent strength. Quarterly base business revenue rose 5% in constant currency year over year. Importantly, non-covid-19 molecular diagnostics revenue increased by 11% organically. Though we don’t expect double-digit growth to be maintained, this strength gives us confidence that Hologic’s molecular business has made a quantum leap over fiscal year 2019, thanks to the significantly enlarged installed base of Panther platforms and the expanded assay menu. All of this reinforces our favorable view of Hologic’s narrow economic moat.