Hologic Earnings: Nonpandemic Revenue Growth Largely Offsets Coronavirus-Related Declines

Hologic posted fiscal fourth-quarter results that slightly exceeded our estimates on the top line, but this was offset by slightly lower earnings. We are leaving our $70 fair value estimate unchanged. The firm continues to manage the reverberations of demand for pandemic tests softening throughout the year, and we’re pleased to see quarterly non-COVID-19 revenue rise 17% in constant currency, which reflects solid demand for Hologic’s nonpandemic products, especially in breast health. Despite the declines in COVID-19 revenue, we think the pandemic-fueled expansion of the Panther installed base has reinforced Hologic’s narrow economic moat. By expanding the base and number of clients touched by the associated switching costs, Hologic has an opportunity to drive more assays through more Panther platforms.