Q4 Earnings Preview for Hologic (NasdaqGS:HOLX)

in EARNINGS/INVESTING IDEAS by

Hologic, Inc. (NasdaqGS:HOLX) is scheduled to report Q4 earnings results after markets close for trading on November 4, 2020.

The company is expected to report earnings of $1.19/share on revenue of $1.108 billion. The consensus earnings per share (EPS) of $1.19/share is based on a poll of 14 analysts and represents a growth in eps of 82.4% over the same quarter last year, when the company reported earnings of $0.65/share.

The revenue forecast of $1.108 billion based on a poll of 11 analysts implies a year-over-year (YoY) growth in revenue of 27.9%. Last year the company reported $865.8 million in revenue for the quarter.

Expected to report EPS growth of 82.4% for Q4, 2020
Metric Expected Prior Year YoY Change
Revenue $1,107.67 $865.80 27.9%
EPS $1.19 $0.65 82.4%

Earnings Call Trends

Historically, management has exceeded analyst expectations 4 out of the last 8 tracked quarters, missed 1 quarter, and met expectations 3 quarters.

What are your expectations from Hologic, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q3, 2020 $0.38 $0.75 95.0% Beat
Q2, 2020 $0.57 $0.57 0% Met
Q1, 2020 $0.61 $0.61 0% Met
Q4, 2019 $0.65 $0.65 0% Met
Q3, 2019 $0.61 $0.63 2.8% Beat
Q2, 2019 $0.57 $0.58 2.1% Beat
Q1, 2019 $0.57 $0.58 1.7% Beat
Q4, 2018 $0.59 $0.58 −1.3% Missed

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 27, 2020, the stock price reacted by increasing 12.3%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 29, 2020 $62.10 $69.71 12.3% Increase
April 29, 2020 $48.69 $50.10 2.9% Increase
January 29, 2020 $54.62 $54.23 −0.7% Decline
November 6, 2019 $48.10 $46.20 −4.0% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.45, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.45 implies a 0.7% chance of earnings manipulation.

Fundamentals And Technical Analysis

Hologic, Inc. is currently trading at $70.02/share, down −1.3% for the day. The company is trading at approximately 95.0% of its 52-week high of $73.63/share. The company’s stock price is up 0.4% since the last earnings report and up 6.3% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 70.85 suggests the company is trading in technically overbought territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:HOLX Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 36.44 and a forward P/E multiple of 22.20.

Hologic, Inc.’s current share price also implies a price-to-book (P/B) multiple of 8.03. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q3
Period End Date June 27, 2020
Stock Price (Current) $70.02
P/E Ratio 36.4x
P/E Ratio (Fwd) 22.2x
PEG Ratio 0.0
Total Debt / Total Capital 15.8%
Levered Free Cash Flow $572.8 million
EV / EBITDA 19.6x

Finbox

Hologic, Inc. is a large-cap stock with a market capitalization of $18.367 billion and a total enterprise value of $21.063 billion. The company operates in the Healthcare sector and the Healthcare Equipment & Supplies industry.

Hologic, Inc. develops, manufactures, and supplies diagnostics products, medical imaging systems, surgical products, and light-based aesthetic and medical treatment systems for women in the United States and internationally. The company offers Aptima molecular diagnostic assays to detect the infectious microorganisms; Aptima quantitative viral load tests for HIV, Hepatitis C, and Hepatitis B; ThinPrep System for use in cytology applications; Rapid Fetal Fibronectin Test that assists physicians in assessing the risk of pre-term birth; and various diagnostic tests for acute respiratory ailments. It also provides breast imaging and analytics, such as 2D and 3D mammography systems and reading workstations, minimally invasive breast biopsy guidance systems and devices, breast biopsy site markers and localization, specimen radiology, and ultrasound and connectivity solutions; and breast conserving surgery products. In addition, the company offers aesthetic treatment systems, as well as TempSure, a radio frequency energy-sourced platform, which offers non-surgical and surgical aesthetic treatments and procedures. Further, it offers NovaSure Endometrial Ablation System for the treatment of abnormal uterine bleeding; MyoSure Hysteroscopic Tissue Removal System for the removal of fibroids, polyps, and other pathology within the uterus; and Fluent Fluid Management System that provides liquid distention during diagnostic and operative hysteroscopic procedures. Additionally, the company offers Horizon DXA, a dual energy X-ray system; and the Fluoroscan Insight FD mini C-arm to perform minimally invasive orthopedic surgical procedures. It sells its products through direct sales and service forces, and independent distributors and sales representatives. Hologic, Inc. has a collaboration with RadNet, Inc. to advance the use of artificial intelligence in breast health. The company was incorporated in 1985 and is headquartered in Marlborough, Massachusetts.

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