Is Hologic a Worthwhile Investment?

With shares of Hologic Inc. (NASDAQ:HOLX) trading at around $22.91, is HOLX an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock’s Movement

Hologic just reported record revenue of $631.4 million in Q1, which was mostly due to year-over-year revenue growth in the company’s three biggest segments: Breast Health, Diagnostics, and GYN Surgical. GAAP EPS came in at $0.01. Non-GAAP EPS was $0.38.

Hologic had many interesting developments over the past few months. In December, a $60 million cash settlement was received from K-V Pharmaceutical Company. In January, Hologic reached an agreement to sell its LIFECODES business to Immucor for $85 million in cash. Also in January, Hologic announced a 3D mammography screening technology that increases cancer detection while reducing the number of false positives. In addition to those developments, there have been FDA clearances over the past month for Hologic’s APTIMA Trichomonas Vaginalis Assay for use on fully-automated PANTHER system, and for contrast-enhanced digital mammography for improved visualization of breast tissue.

Hologic believes its innovative products will continue to drive growth for the foreseeable future. However, that type of statement is expected from any company, which is why we need to look at the big picture prior to forming an opinion on the stock…