While the broader market has struggled with the S&P 500 down 1% since September 2025, Hologic has surged ahead as its stock price has climbed by 12.7% to $75.68 per share. This performance may have investors wondering how to approach the situation.

Is there a buying opportunity in Hologic, or does it present a risk to your portfolio? Dive into our full research report to see our analyst team’s opinion, it’s free.

Why Do We Think Hologic Will Underperform?

We’re happy investors have made money, but we're cautious about Hologic. Here are three reasons you should be careful with HOLX and a stock we'd rather own.

1. Weak Constant Currency Growth Points to Soft Demand

Investors interested in Medical Devices & Supplies - Imaging, Diagnostics companies should track constant currency revenue in addition to reported revenue. This metric excludes currency movements, which are outside of Hologic’s control and are not indicative of underlying demand.

Over the last two years, Hologic’s constant currency revenue averaged 2.5% year-on-year growth. This performance slightly lagged the sector and suggests it might have to lower prices or invest in product improvements to accelerate growth, factors that can hinder near-term profitability.

2. Shrinking Adjusted Operating Margin

Adjusted operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies because it excludes non-recurring expenses, interest on debt, and taxes.

Analyzing the trend in its profitability, Hologic’s adjusted operating margin decreased by 17.7 percentage points over the last five years. Even though its historical margin was healthy, shareholders will want to see Hologic become more profitable in the future. Its adjusted operating margin for the trailing 12 months was 30.1%.

3. EPS Trending Down

We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.

Sadly for Hologic, its EPS declined by 7.3% annually over the last five years, more than its revenue. This tells us the company struggled because its fixed cost base made it difficult to adjust to shrinking demand.

Final Judgment

Hologic doesn’t pass our quality test. With its shares outperforming the market lately, the stock trades at 16.8× forward P/E (or $75.68 per share). This valuation tells us a lot of optimism is priced in - you can find more timely opportunities elsewhere. Let us point you toward a dominant Aerospace business that has perfected its M&A strategy.

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