Hologic Navigates Breast Health Slump: Is the Growth Thesis Intact?

Women’s health medical device maker, Hologic HOLX, is struggling with continued softness in its core Breast Health segment. Sales fell 6.2% in the fiscal 2025 second quarter due to weaker sales of capital equipment. This follows a 2.1% drop in the three months ended December 2024. So, is the downward trend temporary, or does it cloud the segment’s long-term growth prospects?

Gantry placements are expected to remain soft throughout 2025, following two years of elevated mammography shipments post chip shortage. This has led to Hologic’s annual forecast of a low-single-digit decline for Breast Health, with a mid-single-digit organic decline. Still, management’s assumption of growth returning in the fourth quarter signals optimism for the next fiscal year and beyond.

The company holds nearly 80% of the U.S. market with its industry-leading 3D Genius mammography machine. Recurring service revenues, tied to the global installed base of nearly 15,000 gantries, remain the segment’s largest contributor and grew 12% year over year in the second quarter. Hologic’s focus on bolstering the processes, capabilities and leadership in this business helps drive stronger margins. Further, the highly anticipated Envision platform, featuring the first FDA-approved mammography innovation of its kind, is set to make its commercial debut in fiscal 2026.

The 2024 acquisition of Endomagnetics has significantly enhanced Hologic’s Interventional Breast portfolio. The company is upbeat in its momentum through the rest of the year and has recently begun a direct sales approach of Endomag products via its North American salesforce, aiming to capture the expanding wireless localization market.

HOLX Peer Comparison

One of Hologic’s key breast health rivals, GE Healthcare GEHC, delivered record double-digit order growth in the first quarter of 2025 due to higher U.S. customer investments in imaging products, particularly for cardiology and oncology. GEHC’s organic imaging revenues increased 5% year over year. GE Healthcare’s new Invenia Automated Breast Ultrasound Premium is the first FDA-approved breast ultrasound supplemental screening technology for detecting cancer in dense breasts.

Meanwhile, Becton, Dickinson and Company BDX, or BD, is a prominent market player in breast biopsy devices sold through its Peripheral Intervention business unit. While the broader Interventional segment dropped 2.2% in the fiscal 2025 second quarter, BDX expects stronger growth in the second half, fueled by PureWick and Phasix. BD’s new Phasix ST Umbilical Hernia Patch should also contribute. 

The Zacks Rundown for HOLX

Year to date, Hologic shares have dropped 12.6%, steeper than the industry’s decline of 9.8%.

From a valuation standpoint, HOLX trades at a forward 12-month earnings multiple of 14.02X compared to the industry average of 28.64X. It carries a Value Score of B.

The Zacks Consensus Estimate for HOLX’s earnings for both fiscal 2025 and 2026 has been revised downward over the past 90 days.

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

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

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