DHR - Hologic's Underperformance Makes This A Name Worth Further Consideration
- While COVID-19 has driven recent quarterly beats, the Street seems to be overlooking the better long-term positioning of Hologic's diagnostics business post-COVID-19.
- The pandemic greatly accelerated Hologic's diagnostics system placements and the large majority of COVID-19 customers are using the Panther system for other tests.
- Breast Health has some near-term challenges from semiconductor availability, but the shift toward more service revenue will pay dividends down the line.
- Mid-single-digit core revenue growth and mid-to-high 20%'s FCF margins can support a fair value in the low-$80's, but sentiment may be limited by weaker upcoming comps and margin deleverage.
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Hologic's Underperformance Makes This A Name Worth Further Consideration