Hologic Focuses on Breast Health Turnaround This Year: Can It Deliver?

Hologic HOLX has built a resilient Breast Health business, with its mammography products holding a leading market share. The division struggled this year, with revenues decreasing 2.1% and 6.9% in the first and second quarters of fiscal 2025, respectively, due to an anticipated slowdown in soft capital equipment sales and budget constraints among private and government hospital customers abroad. Nonetheless, Hologic expects Breast Health to return to healthy growth in the fourth quarter.

A new leadership team is now in place and has already made progress in three key areas, setting the stage for better future growth. One of these was to create a clear separation between the capital and disposable product sales representatives, aligning the different skill sets required for these sales processes. Hologic believes that this reorganization, along with a more defined selling strategy, will lead to a clearer focus and improved performance within its commercial channels.

In addition, the sales team has refined its end-of-life strategy for aging gantries that remain in the field. With clear visibility into the locations of these older units, Hologic is launching a new offensive strategy that actively encourages customers and its sales reps to pursue upgrading them.

The Endomagnetics acquisition in 2024 expanded Hologic’s presence in the interventional breast health market, adding wireless breast surgery localization and lymphatic tracing solutions to its portfolio. The business presumably entered the second half of fiscal 2025 with strong momentum. Hologic has implemented a direct sales approach for Endomagnetics products in North America, replacing the previously used distributor.

Service revenues tend to provide greater stability, rising 12% year over year in the second quarter and accounting for 21% of Hologic’s total revenues. With Endomagnetics now a part, Hologic has enough scale to emphasize more on recurring revenues, alongside a capital sales focus. This is expected to support the upcoming Envision platform launch and also maximize the reach of Endomag products and services.  

Updates From Hologic’s Breast Health Peers

GE Healthcare GEHC and RadNet RDNT are two prominent players competing with Hologic in the breast health space. GEHC recently announced the commercial availability of an advanced floor-mounted digital X-ray system, Definium Pace Select ET, to deliver high-image quality and optimize efficiency in highly demanding environments while enhancing access and affordability. GE Healthcare’s Women’s Health products use X-ray technology to help clinicians screen for and diagnose breast cancer, as well as bone and metabolic diseases in women.

RadNet’s subsidiary, DeepHealth, recently completed the acquisition of iCAD, Inc.  —  a global leader in AI-powered breast health solutions. The addition of iCAD’s extensive AI portfolio, including breast cancer detection, risk evaluation, breast density and breast arterial calcification assessment, significantly boosts RadNet’s Digital Health segment.

HOLX Stock Performance, Valuation and Estimates

Over the past year, Hologic shares have declined 20.4% compared with the industry’s 10.5% fall.

Hologic is trading at a forward 12-month price-to-earnings of 3.45X, lower than the industry average of 4.17X. The stock carries a Value Score of B at present.

Hologic’s fiscal 2025 and 2026 EPS estimates have shown a bearish trend over the past 90 days.  

HOLX stock currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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