Hologic Earnings: Adoption of New Assays and Incorporation of AI Bode Well for Hologic

Narrow-moat Hologic’s fiscal first-quarter reflected the firm’s navigation of the tail end of COVID-19 disruption, and considering the underlying strength of the firm’s non-COVID-19 business, management raised its outlook. However, we’re leaving our $70 fair value estimate unchanged given our projections for full-year 2024 remain bounded by this new guidance. Quarterly consolidated revenue fell roughly 6% year over year, driven by waning COVID-19 diagnostic demand. Excluding COVID-19 sales, quarterly diagnostics revenue fell 1%, which was substantially softer than the double-digit growth seen in the previous two quarters. Nevertheless, breast health and surgical posted solid 12% and 5% growth, respectively, in the quarter to more than offset diagnostics.