Hologic, Inc. Just Beat EPS By 32%: Here's What Analysts Think Will Happen Next

Hologic, Inc. (NASDAQ:HOLX) just released its first-quarter report and things are looking bullish. The company beat forecasts, with revenue of US$1.0b, some 3.0% above estimates, and statutory earnings per share (EPS) coming in at US$1.03, 32% ahead of expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Hologic

Taking into account the latest results, Hologic's 17 analysts currently expect revenues in 2024 to be US$4.02b, approximately in line with the last 12 months. Per-share earnings are expected to soar 51% to US$3.31. In the lead-up to this report, the analysts had been modelling revenues of US$4.00b and earnings per share (EPS) of US$3.22 in 2024. So the consensus seems to have become somewhat more optimistic on Hologic's earnings potential following these results.

The consensus price target was unchanged at US$82.66, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Hologic analyst has a price target of US$95.00 per share, while the most pessimistic values it at US$70.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Hologic's revenue growth is expected to slow, with the forecast 1.9% annualised growth rate until the end of 2024 being well below the historical 6.5% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.9% per year. Factoring in the forecast slowdown in growth, it seems obvious that Hologic is also expected to grow slower than other industry participants.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Hologic's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Hologic's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$82.66, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Hologic analysts - going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Hologic has 3 warning signs we think you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.