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Hologic Inc HOLX

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Hologic Delivers Strong Second Quarter, but Slowdown Is on the Horizon As COVID-19 Recedes

Debbie S. Wang Senior Equity Analyst

Analyst Note

| Debbie S. Wang |

Hologic posted another quarter of stellar results on the back of the pandemic, though there are signs this tailwind is losing steam, which caused shares to pull back after the market close. We’ve made some modest adjustments to our standing assumptions for the diagnostics segment to decline year over year in the second half of the fiscal year, but these did not materially shift our fair value estimate. The pandemic has afforded Hologic a major opportunity to increase its installed base of diagnostic platforms. We think Hologic has solidified its narrow economic moat by growing its global installed base by roughly 38% in the last 12 months, which has introduced the switching costs associated with its in vitro diagnostic platforms to a new set of customers.

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Company Profile

Business Description

Hologic manufactures proprietary products for the healthcare needs of women. The company operates in five segments: breast health (44% of sales), diagnostics (39%) surgical (14%), and skeletal health (3%). While the company traditionally focused on breast health, the acquisition of Gen-Probe put greater emphasis on commercial diagnostics. The United States accounts for the largest portion of the firm's revenue (74%), followed by Europe (12%), Asia (9%), and other international markets (5%). Hologic is headquartered in Bedford, Massachusetts.

Contact
250 Campus Drive
Marlborough, MA, 01752
T +1 508 263-2900
Sector Healthcare
Industry Medical Instruments & Supplies
Most Recent Earnings Mar 31, 2021
Fiscal Year End Sep 26, 2021
Stock Type Classic Growth
Employees 5,814