This medical equipment company walloped earnings estimates last quarter, posting EPS of $0.75 vs. the $0.38 that Wall Street had expected. Analysts expect the company to grow at a rate of 38.8% next year.
Hologic, Inc. (HOLX)
From Dow Theory Forecasts
Hologic joins the Long-Term Buy List. The company produces medical-diagnostic products, imaging systems, and surgical products, with a focus on women’s health. Hologic’s Quadrix Overall score of 83 reflects its strong operating momentum, solid long-term growth trends, and rising profit estimates.
Although sales slipped 1% for the 12 months ended June, per-share profits rose 9% and operating cash flow increased 11%. That growth accelerated in the June quarter, with earnings per share up 9% and operating cash flow up 36%.
Analyst profit estimates are up sharply over the past 60 days, with the consensus projecting 62% growth in the September quarter on 14% higher sales. For fiscal 2021 ending September, Hologic is expected to grow earnings 37% and sales 20%.
The stock trades below norms for both the S&P 1500 health-care sector and health-equipment industry based on trailing earnings, estimated 2020 earnings, and estimated 2021 earnings. Hologic is being initiated as a Long-Term Buy.
Richard Moroney, CFA, Dow Theory Forecasts, dowtheory.com, 800-233-5922, September 7, 2020