Hologic (HOLX) Soars 7.7%: Is Further Upside Left in the Stock?

Hologic HOLX shares ended the last trading session 7.7% higher at $68.2. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 6.6% loss over the past four weeks.

Hologic witnessed a strong price rise on investors’ optimism following a Reuters report stating that private equity firms Blackstone and TPG have renewed their interest in acquiring the company. If finalized, the deal could become one of the largest healthcare take-private transactions of the year. 

This medical device maker is expected to post quarterly earnings of $1.10 per share in its upcoming report, which represents a year-over-year change of +8.9%. Revenues are expected to be $1.03 billion, up 4.6% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Hologic, the consensus EPS estimate for the quarter has been revised marginally lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on HOLX going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Hologic belongs to the Zacks Medical - Instruments industry. Another stock from the same industry, Alcon ALC, closed the last trading session 0.6% lower at $77.2. Over the past month, ALC has returned -13.9%.

Alcon's consensus EPS estimate for the upcoming report has changed -3.8% over the past month to $0.77. Compared to the company's year-ago EPS, this represents a change of -4.9%. Alcon currently boasts a Zacks Rank of #3 (Hold).

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This article originally published on Zacks Investment Research (zacks.com).

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