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Can HOLX Stock Rebound from Its Recent Lows?

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Stock performance

On March 28, 2018, Hologic (HOLX) stock ended trading at a closing price of $37.39. The stock registered its 52-week low of $35.33 on February 9, 2018. The company reported its 1Q18 earnings on February 8, 2018. Its sales and earnings were above analysts’ estimates, but its margins came in below expectations. The company registered a decline in its diagnostics segment sales. The divestiture of the company’s blood screening business is expected to temporarily impact its growth over the near term. On the day of the results, HOLX stock fell more than 4%. The momentum in the downward trend continued over the next day, and the stock fell 6.7% compared to the opening price on February 8, 2018. Many analysts covering Hologic stock cut their price targets for the stock over the next 12 months on February 9, 2018.

Currently, HOLX stock is trading lower than its 200-day moving average of $39.88 as well as its 50-day moving average of $38.53.

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Notably, HOLX stock registered a massive decline in October 2017 but recovered by the end of the year due to positive investor sentiment triggered by key product launches, company growth strategies, and robust company fundamentals. However, the stock has been on a declining trend since its 1Q18 earnings release on February 8, 2018.

Comparison with industry and market performances

Year-to-date, HOLX stock has fallen 12.5%. However, the stock has recovered to a certain extent over the past month and has generated a one-month return of -3.7% as of March 29, 2018. Over the last six months, HOLX stock has returned ~2.2% to its investors. The one-year return generated by HOLX stock stands at -12%. In comparison, the market, which can be represented by the S&P 500 Index, returned ~10% over the same period. If we look at the industry performance, which can be represented by the performance of the Health Care Select Sector SPDR ETF (XLV), we see that the US healthcare industry rose ~8.3% on average over the last year. HOLX thus largely underperformed the industry as well as the broader market over the last year.

As of March 29, 2018, Hologic’s peers Varian Medical Systems (VAR), Abbott Laboratories (ABT), and Thermo Fisher Scientific (TMO) have provided one-year stock price gains of 33.3%, 32.6%, and 33.7%, respectively.

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