Last Update 18 Dec 25

HOLX: Buyout Terms And Neutral Ratings Will Shape Trading Through 2026

We trim our Hologic price target slightly to approximately $76.50, as analysts coalesce around the proposed Blackstone and TPG takeout valuation of up to $79.00 per share and see limited upside beyond the agreed acquisition terms.

Analyst Commentary

Street research following the announced takeout has converged around the proposed valuation, with most firms adjusting ratings and targets to reflect a view that the deal price largely caps near term upside.

Bullish analysts highlight some positives and potential optionality, while bearish analysts focus on the limited upside to the offer and ongoing execution and growth challenges.

Bullish Takeaways

Bullish analysts view the up to $79 per share offer as a fair reflection of Hologic's intrinsic value, with current targets clustering just below the deal price.
Several upward price target revisions, into the mid to high $70s, signal that prior public market valuations underappreciated the franchise and cash generation.
Some see the structure of the consideration, including contingent value elements, as offering modest incremental upside if operational milestones or growth initiatives are executed successfully.
The transaction timing is seen as de-risking near term market volatility and providing shareholders with clearer visibility on value realization versus waiting for a multi-year organic growth inflection.

Bearish Takeaways

Bearish analysts argue that with ratings cut toward Neutral or Market Perform, the stock's risk reward is now skewed by the narrow spread to the offer price and limited prospect for a competing bid.
Many note that Hologic operates in lower growth end markets, which constrains upside to fundamental re-rating and makes it unlikely that standalone valuation would have exceeded the deal terms in the near term.
Past commercial execution missteps have eroded confidence in management's ability to unlock higher sustainable growth, reinforcing the view that the buyout premium is adequate rather than compelling.
Some caution that, even assuming a smooth close by the first half of 2026, regulatory and execution risks remain, limiting appetite to ascribe meaningful upside beyond the agreed transaction value.

What's in the News

Blackstone and TPG are in advanced talks to acquire Hologic at a price above $75 per share, valuing the company at more than $17 billion including debt, with a deal potentially announced within days (Bloomberg)
Hologic has entered into a definitive agreement to be acquired by funds managed by Blackstone and TPG, along with ADIA and GIC, for $76 per share in cash plus up to $3 per share in contingent value rights, implying a $17.2 billion transaction that is expected to close in the first half of 2026, pending shareholder and regulatory approvals
New data from Massachusetts General Hospital show Hologic's Genius AI Detection solution retrospectively flagged about one third of previously missed breast cancers and nearly 90% of cancers already identified by radiologists, underscoring the potential of AI to enhance mammography detection
Hologic received FDA 510(k) clearance and EU CE marking for its Panther Fusion GI Bacterial and Expanded Bacterial Assays, expanding the Panther platform into rapid molecular testing for infectious gastroenteritis and supporting more targeted antibiotic use
At upcoming major radiology meetings, multiple studies will evaluate Hologic's AI powered 3DQuorum imaging and Genius AI Detection technologies, focusing on maintaining cancer detection while improving radiologist workflow and assessing performance versus human readers

Valuation Changes

Fair Value Estimate: Maintained at approximately $76.50 per share, aligning with the proposed takeout valuation and implying no material change in intrinsic value assumptions.
Discount Rate: Fallen slightly from about 8.06% to roughly 8.03%, reflecting a marginal reduction in perceived risk or cost of capital.
Revenue Growth: Effectively unchanged at around 5.0% annually, indicating a stable outlook for top line expansion.
Net Profit Margin: Stable at approximately 20.8%, suggesting no meaningful revision to long term profitability expectations.
Future P/E: Edged down slightly from about 21.4x to 21.3x, implying a modestly lower valuation multiple on forward earnings.

Innovation in core diagnostic and screening technologies, supported by AI integration, is driving market share gains and expanding margins through premium offerings and product upgrades.
Portfolio expansion, strategic acquisitions, and improved operations are diversifying revenue, supporting resilience, and fueling sustained growth across international markets.
Structural and persistent international, segment, and margin challenges threaten revenue growth, profitability, and earnings momentum without successful execution of higher-margin innovation and market recovery.

Catalysts

About Hologic

Engages in the development, manufacture, and supply of diagnostics products, medical imaging systems, and surgical products for women's health through early detection and treatment worldwide.What are the underlying business or industry changes driving this perspective?

The global rise in preventive women's health and the aging population, combined with growing healthcare expenditure (especially in emerging markets), are positioning Hologic's core businesses for long-term growth. This underlies sustained demand for diagnostic and screening products and should drive higher utilization and recurring revenue.
Continued innovation in 3D mammography and the planned launch of the next-generation Envision system, alongside the integration of AI-driven Genius Detection PRO, position Hologic to capture greater market share, enable premium pricing, and drive margin expansion as older gantries are replaced and product upgrades accelerate.
Expansion of the molecular diagnostics portfolio (notably Panther Fusion assay menu and increased U.S. adoption of new tests for women's health) is broadening the recurring revenue base and supporting steady organic growth, with runway provided by both increased test menu and untested patient populations.
Strategic M&A (notably Endomag and Gynesonics) and accelerated international expansion in surgical and interventional breast health products are increasing revenue diversification and scale, enhancing resilience against U.S. market fluctuations and supporting top-line growth and operating margin improvement.
Operational improvements-including optimized salesforce execution, targeted end-of-life upgrades, and substantial mitigation of supply chain tariff impacts-are restoring growth momentum and efficiency, supporting EPS recovery and stabilizing or improving net margins into fiscal 2026 and beyond.

Hologic Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Hologic's revenue will grow by 5.0% annually over the next 3 years.
Analysts assume that profit margins will increase from 13.8% today to 21.2% in 3 years time.
Analysts expect earnings to reach $992.5 million (and earnings per share of $4.61) by about September 2028, up from $557.1 million today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as $880 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 19.5x on those 2028 earnings, down from 26.6x today. This future PE is lower than the current PE for the US Medical Equipment industry at 29.7x.
Analysts expect the number of shares outstanding to decline by 1.99% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.77%, as per the Simply Wall St company report.

Hologic Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The company is experiencing significant, ongoing headwinds in China due to a challenging operating environment and substantial revenue declines (down over 50% YoY and now less than $10M/quarter versus $60-70M annualized); this creates a risk of sustained weakness in international revenue growth and dampens overall corporate revenue and earnings momentum into fiscal 2026.
Funding cuts to U.S. aid in Africa, notably impacting the HIV diagnostics business, have reduced demand and are expected to persist, representing another structural headwind to international diagnostics revenue and compressing consolidated revenue growth in the first half of fiscal 2026.
Tariffs remain a substantial headwind despite recent mitigation efforts; Hologic expects $10-12M per quarter in ongoing tariff expenses, translating to nearly 100 basis points of gross margin pressure in fiscal 2026, directly impacting net margins and profitability.
The Breast Health segment remains exposed to elongated gantry replacement cycles and declining legacy system revenues, heightening the risks associated with over-dependence on this business line and leaving revenue and earnings vulnerable to slower-than-expected product upgrades or replacement demand.
Gross and operating margin trends are under structural pressure due to product mix shifts (including lower-margin and discontinued products like Fluoroscan), dilutive effects from recent acquisitions, and residual COVID testing declines, putting sustained net margin expansion and long-term earnings growth at risk unless higher-margin innovation and volume growth materialize as planned.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $73.867 for Hologic based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $94.0, and the most bearish reporting a price target of just $65.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $4.7 billion, earnings will come to $992.5 million, and it would be trading on a PE ratio of 19.5x, assuming you use a discount rate of 7.8%.
Given the current share price of $66.72, the analyst price target of $73.87 is 9.7% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

HOLX: Downgrades And Buyout Agreement Will Shift Near-Term Share Performance