Reasonable PE Ratio
Low EV/EBITDA Ratio
Strong Gross Profit Margin
Healthy Net Profit Margin
Extremely Low Debt Levels
Strong Liquidity Ratios
🏆 Strong Financial Foundation
🔬 Market Leadership in Diagnostics
📈 Effective Capital Deployment Strategy
🚀 Growth Through Innovation
🌍 International Expansion Potential
High Price-to-Sales Ratio
Moderate Operating Profit Margin
📉 Breast Health Market Challenges
🌧️ Economic and Policy Uncertainties
Hologic demonstrates a strong business model with significant competitive advantages in diagnostics and a solid financial foundation. However, challenges in the Breast Health segment and external economic uncertainties pose risks to growth. Future prospects remain positive due to innovation and international expansion.
Analysis Date: February 5, 2025
Last Updated: March 12, 2025
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$40.38
Current Market Price: $59.30
IV/P Ratio: 0.68x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
-47.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for HOLX
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (18.84)
P/B ratio ≤ 1.5 (2.94)
Current ratio ≥ 2.0 (3.49x)
Long-term debt < Net current assets (0.01x)
Margin of safety (-47.0%)
HOLX does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
The gross profit margin of 56.18% indicates that the company is effective in managing its production costs relative to its revenues.
A net profit margin of 18.42% reflects strong overall profitability, suggesting that the company retains a significant portion of its revenue as profit.
The operating profit margin of 23.94% is decent but could be improved, indicating that operational efficiency may be an area for enhancement.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
15.11%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-16)
Return on Assets (ROA)
Measures how efficiently a company uses its assets to generate profits
2.30%
Higher values indicate better asset utilization
TTM (as of 2025-04-16)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
56.18%
Higher values indicate better efficiency in production
TTM (as of 2025-04-16)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
18.42%
Higher values indicate better overall profitability
TTM (as of 2025-04-16)
With a debt-to-equity ratio of 0.01 and a debt-to-assets ratio of 0.005, HOLX shows outstanding financial health with negligible debt, reducing financial risk.
The current ratio of 3.49 and quick ratio of 2.78 indicate that the company has more than enough short-term assets to cover its liabilities, showcasing solid liquidity.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.01x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q1 2025
Current Ratio
Current assets divided by current liabilities
3.49x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q1 2025
Hologic has demonstrated significant financial resilience, with total revenue growing from approximately $2.5 billion in 2014 to over $4 billion in 2024, achieving a compound annual growth rate (CAGR) of 4.8%. Non-GAAP earnings per share increased from $1.46 to $4.08 during the same period, representing a CAGR of 10.8%. This indicates strong operational efficiency and profitability.
Hologic holds a strong competitive position in the diagnostics market, particularly with its Panther and Panther Fusion platforms, which have over 20 assays. The company benefits from a reliable cash flow generated by its market-leading products and has expanded its offerings, indicating a robust product strategy.
The company has a disciplined approach to capital deployment, evidenced by share buybacks and strategic acquisitions such as Gynesonics, which are expected to enhance revenue growth. The strong cash flow of $189 million in Q1 and $2 billion in cash and investments further supports this strategy.
The Breast Health segment reported disappointing revenue, declining by 2.1% due to lower capital equipment sales and market conditions. The company acknowledged that 2025 will be a softer year for gantry placements, indicating potential volatility in this segment.
Hologic is poised for future growth through continued innovation and product development. The upcoming launch of the Envision platform and expansion of the Panther Fusion menu are expected to drive future revenue growth and enhance market share.
The company has strengthened its capabilities to grow internationally and is focused on direct market entry in more geographies. This global expansion is expected to contribute positively to future revenue growth.
Hologic faces potential headwinds from economic factors such as a stronger US dollar and policy changes from the new US administration that could disrupt revenue, particularly in international markets and HIV testing.