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.