Breaking Down Hologic, Inc. (HOLX) Financial Health: Key Insights for Investors

You're looking at Hologic, Inc. (HOLX) right now, trying to figure out if the recent financial strength justifies the valuation, but honestly, the biggest variable isn't their core business-it's the massive private equity deal. The company just closed out a solid fiscal 2025, reporting Q4 revenue of $1,049.5 million, a 6.2% year-over-year increase, and non-GAAP diluted earnings per share (EPS) of $1.13, beating consensus. But let's be real: that performance is now secondary to the October 21, 2025, announcement of the definitive agreement to be acquired by funds managed by Blackstone and TPG for up to $79 per share. This potential buyout, which values the company at roughly $18.3 billion, is the main driver, still, the underlying health of their Diagnostics and GYN Surgical segments matters because any hiccup in the core business-like the Diagnostics revenue of $454.1 million being only up 2.4%-could defintely impact the finalization of that price. We need to break down the full-year picture, which analysts project to land around $4.10 billion in revenue, to see what the buyers are actually paying for.

Revenue Analysis

You need to know if Hologic, Inc. (HOLX) is still a growth story or if it's hitting a plateau after the pandemic-era boom. The direct takeaway is that Hologic delivered a solid, albeit modest, top-line increase for the fiscal year (FY) 2025, with total annual revenue reaching approximately $4.10 billion, marking a year-over-year growth of 1.74%.

The company's revenue streams are clearly dominated by its core women's health segments, which is defintely where the long-term value lies. Diagnostics and Breast Health are the heavy hitters, but GYN Surgical is the one showing the most impressive near-term momentum. Here's the quick math on the contribution from the primary sources in the fourth quarter of FY 2025, which gives you the clearest picture of the current run-rate:

The Diagnostics segment, which is the largest contributor, is shifting its focus. While reported revenue was $454.1 million in Q4 2025, the overall growth rate of 2.4% is being held back by the expected decline in COVID-19 assay revenue. The real story here is the core molecular diagnostics business-products like the BV CV/TV and Panther Fusion assays-which showed strong underlying organic growth.

Breast Health revenue, totaling $393.7 million in Q4 2025, is in a recovery phase, posting a 4.8% year-over-year increase. This rebound was helped by better U.S. sales execution and the inclusion of the acquired Endomagnetics business, which adds products for breast-conserving surgery. Still, the GYN Surgical segment is the standout, delivering a 10.2% growth rate in Q4, reaching $172.5 million. This surge is directly tied to the success of products like MyoSure and Fluent, plus the strategic acquisition of Gynesonics, which contributed to growth with its Sonata system for uterine fibroids.

What this estimate hides is the successful pivot away from the temporary COVID-19 revenue spike. The company is now back to a more sustainable, diversified growth profile driven by its core women's health technology portfolio. For a deeper dive into the strategic implications of these numbers, check out Breaking Down Hologic, Inc. (HOLX) Financial Health: Key Insights for Investors.

• Monitor the organic diagnostics growth (ex-COVID-19) for true performance.
• Watch GYN Surgical; its double-digit growth is a key opportunity.
• Confirm the Breast Health rebound holds through FY 2026.

Finance: Track organic revenue growth by segment monthly to isolate core business health.

Profitability Metrics

You want to know if Hologic, Inc. (HOLX) is making money efficiently, and the short answer is yes, but the headline numbers for fiscal year 2025 are a bit messy because of one-off charges. The underlying operational efficiency is defintely strong, which is what matters for long-term investors.

For the full fiscal year 2025, Hologic reported total revenue of $4.101 billion. Your first glance at the net profit margin might cause concern, but you need to look closer at the non-GAAP (Generally Accepted Accounting Principles) numbers, which strip out things like acquisition-related costs and impairment charges, giving you a cleaner view of core business performance.

Here's the quick math on Hologic's core profitability for the year ending September 27, 2025, compared to the broader industry:

The gross profit for the twelve months ending September 30, 2025, was $2.118 billion, which gives you a GAAP gross margin of about 51.6% on that $4.101 billion in revenue. This margin is slightly lower than what you see with some high-end peers in the medical device space, but it's still a healthy margin for a diagnostics and surgical products company. The GAAP Gross Margin for Q4 2025 specifically was 55.6%, but it was dragged down by expenses related to closing the Manchester, England manufacturing facility.

The real story on operational efficiency is in the operating margin. The Non-GAAP operating margin for the fourth quarter of 2025 hit 31.2%. That is outstanding. It grew by 120 basis points (1.2%) from the prior year, which tells me the management team is executing well on cost management and getting more leverage from their operating expenses as revenue grows. This is a critical sign of a well-run business.

The net profit margin, however, is where the noise is. The trailing twelve months (TTM) net profit margin fell to 13.8%, down from 19.6% last year. This drop is largely due to a significant one-off loss of $277.8 million that hit the books in the last twelve months. Anyway, the consensus view is that this is temporary; analysts expect the net profit margin to rebound strongly to 21.2% in the next three years. The core business is performing, so the market is looking past the non-recurring items.

Here's what you should focus on regarding the trends:

• Annual Gross Profit declined 4.93% from 2024 to 2025, a headwind to watch.
• Non-GAAP operating margin expanded by 120 basis points in Q4 2025, a clear win for cost control.
• Net Income for FY 2025 is estimated around $565.7 million, which includes the impact of those one-time charges.
• The margin recovery hinges on successful rollout of higher-margin innovations like 3D mammography.

To understand the players driving this financial performance, you should look at Exploring Hologic, Inc. (HOLX) Investor Profile: Who's Buying and Why?

Debt vs. Equity Structure

You're looking at Hologic, Inc. (HOLX) and wondering how they pay for their growth-is it through borrowing or shareholder capital? The direct takeaway is that Hologic maintains a conservative, equity-heavy financing structure, which is a sign of financial strength, especially in a capital-intensive sector like medical technology.

As of mid-2025, Hologic's balance sheet shows a manageable debt load, with total debt sitting at approximately $2.52 billion. Here's the quick math on their leverage: the vast majority of this is long-term debt, which was about $2.519 billion for the quarter ending June 30, 2025. Their short-term liabilities (which include the current portion of long-term debt and other payables) were around $977.2 million at the same time. This structure means their near-term liquidity risk is low, which is defintely a good thing.

The most telling metric is the Debt-to-Equity (D/E) ratio, which measures total debt against total shareholder equity. Hologic's D/E ratio as of the second half of 2025 is a healthy 0.52. To be fair, this is a strong position. For context, the average D/E ratio for the Surgical and Medical Instruments and Apparatus industry has been closer to 0.70.

Here's what that comparison tells us:

• Hologic uses 52 cents of debt for every dollar of equity.
• The industry average uses 70 cents of debt for every dollar of equity.
• Hologic is less reliant on debt financing than many of its peers.

This low leverage gives Hologic more flexibility to navigate economic downturns or fund large, unexpected acquisitions without straining their balance sheet. You want to see this kind of capital discipline from a mature medical tech company.

The company is very active in managing its debt profile. For example, in July 2025, Hologic refinanced its existing credit facilities, which included a $1.169 billion term loan and a $1.250 billion revolving credit facility. This move was smart because it extended the maturity date out to July 15, 2030. This refinancing pushes out near-term repayment pressure and secures favorable terms for the next five years, giving management clear runway for strategic planning, which you can read more about in their Mission Statement, Vision, & Core Values of Hologic, Inc. (HOLX).

Hologic balances its funding by leaning on equity and internally generated cash flow, not just debt. The low D/E ratio is a direct result of their focus on using cash for share buybacks-repurchasing stock to boost Earnings Per Share (EPS)-alongside strategic, bolt-on acquisitions. This dual approach of managing debt conservatively while returning capital to shareholders via buybacks is a clear signal that management sees the stock as undervalued and is confident in its future cash flow generation.

The key is that Hologic has the financial flexibility to invest in its core business-like diagnostics and women's health products-without being constrained by high interest payments. Their interest coverage ratio, which shows how easily they can pay interest on their debt, is excellent, which means the debt they do carry is well-supported by operating profits.

Liquidity and Solvency

You need to know if Hologic, Inc. (HOLX) can cover its short-term bills, and honestly, the answer is a resounding yes. The company's liquidity position for the 2025 fiscal year is exceptionally strong, reflecting a highly disciplined approach to cash management and a healthy balance sheet. This strength gives management significant flexibility for strategic investments and capital returns.

Here's the quick math on their immediate financial health, using the most recent fiscal year-end data. The core liquidity metrics-Current Ratio and Quick Ratio-show a business with ample liquid assets to meet its obligations, even if sales slow down.

• Current Ratio: 3.8x
• Quick Ratio: 3.09x (calculated)

The Current Ratio of 3.8x is well above the healthy 1.5x to 3.0x range for the sector, meaning Hologic, Inc. has $3.80 in current assets for every dollar of current liabilities. Plus, the Quick Ratio, which strips out inventory (a less liquid asset), remains robust at 3.09x (calculated), confirming the quality of their current assets. That's a defintely solid buffer.

Working Capital Trends and Cash Flow Overview

The working capital position is a clear strength, showing the company's ability to fund its day-to-day operations without stress. Based on the fiscal year 2025 Current Assets of $3,668 million and calculated Current Liabilities of approximately $965.3 million, Hologic, Inc. holds a substantial working capital of about $2,702.7 million (calculated).

The cash flow statement further illustrates this financial power. The company's core business is a strong cash generator, which is the best kind of liquidity. For the full fiscal year 2025, Net Cash Provided by Operating Activities was a significant $1,057.1 million.

The trends in the three major cash flow components map out a clear strategic focus:

• Operating Cash Flow (OCF): Strong and consistent, totaling $1,057.1 million in FY 2025. This demonstrates the core business's ability to convert sales into cash, which is the lifeblood of any medical technology company.
• Investing Cash Flow (ICF): This is consistently negative, which is what you want to see in a growth-focused company, as it signals investment back into the business. A key use of cash in FY 2025 was for the acquisition of businesses, net of cash acquired, totaling $321.5 million.
• Financing Cash Flow (FCF): The primary use of cash here is for capital return to shareholders. For example, in the first quarter of fiscal 2025 alone, the company repurchased 6.8 million shares for $517 million, showcasing a commitment to returning capital while maintaining a manageable debt load.

Liquidity Strengths and Investor Takeaway

The significant cash and cash equivalents of $1,960 million as of September 2025, plus an additional $243.2 million in short-term investments, provide an enormous liquidity cushion. This capital structure is extremely healthy. There are no near-term liquidity concerns; the strength here is a major competitive advantage, allowing the company to pursue mergers and acquisitions (M&A) or continue aggressive share buybacks without straining operations or needing to raise new debt.

The clear action for you, the investor, is to recognize that this high liquidity and strong cash generation translate directly into financial flexibility. This is a company that can weather economic downturns and fund its own growth initiatives. This deep dive into the numbers is crucial for a full picture. You can read more about the strategic implications of these numbers in the next chapter: Breaking Down Hologic, Inc. (HOLX) Financial Health: Key Insights for Investors

Valuation Analysis

You're looking at Hologic, Inc. (HOLX) and wondering if the market is giving you a fair shake on the price. The short answer is that the stock is currently priced near the high end of its historical valuation range, but analysts see a small, clear path for near-term growth. The consensus is a firm 'Hold' right now, but that doesn't mean you should ignore the fundamentals.

As of November 2025, Hologic's stock price of around $74.36 sits comfortably above its 52-week low of $51.90, but it's still below the 52-week high of $80.31. The stock has seen a slight dip, decreasing by 5.49% over the last 12 months, which suggests the market is digesting recent performance and future growth expectations rather than pricing in a major boom. It's not a screaming buy, but it's defintely not a fire sale, either.

Is Hologic, Inc. (HOLX) Overvalued or Undervalued?

To figure out if Hologic is overvalued, we need to look at its core valuation multiples. These ratios compare the stock price to the company's earnings, book value, and cash flow, giving us a clearer picture than just the stock price alone. Here's the quick math on the key metrics for the 2025 fiscal year:

• Price-to-Earnings (P/E) Ratio: The trailing P/E is about 17.36. For a medical technology company, this is reasonable, but the forward P/E of 16.26 suggests analysts are expecting a slight bump in earnings per share (EPS) for the next year.
• Price-to-Book (P/B) Ratio: This ratio is currently around 3.3x. This means the market values the company at 3.3 times its net asset value (book value). This is a solid premium, telling us investors believe Hologic's intangible assets-like its technology and brand-are worth much more than its physical assets.
• Enterprise Value-to-EBITDA (EV/EBITDA): The latest twelve months (LTM) EV/EBITDA is 13.1x. This multiple is used to compare companies with different debt loads. Historically, Hologic's median EV/EBITDA from 2021 to 2025 was also 13.1x, so the stock is trading right at its five-year average valuation based on cash flow.

Based on these multiples, Hologic is trading at a fair valuation relative to its own recent history and is certainly not cheap, but it's not wildly overvalued either. This is why the analyst consensus is so split.

Analyst Consensus and Dividend Profile

The Wall Street view on Hologic is decidedly neutral. Of the nineteen research firms covering the stock, the average recommendation is a Hold. Thirteen analysts have a 'Hold' rating, while five have a 'Buy' and one has a 'Strong Buy.' This split consensus is a classic sign that the stock is fairly valued, with little room for a massive breakout but also limited downside risk.

The average 1-year target price is set at $79.77, which implies a modest upside of about 7.30% from the current price. This small premium is likely tied to the company's consistent revenue growth-up 6.2% year-over-year in the last reported quarter-and its ability to beat quarterly EPS estimates.

One thing to note: Hologic does not pay a dividend. Its dividend yield and payout ratio for the 2025 fiscal year are both 0.00%. This is common for growth-focused medical technology companies that prefer to reinvest their earnings back into research and development, or use it for share buybacks and acquisitions, to drive future stock appreciation instead of income.

If you're looking for a deep dive into the institutional money behind the stock, you should check out Exploring Hologic, Inc. (HOLX) Investor Profile: Who's Buying and Why?

Your next step should be to look at the forward-looking growth pipeline, particularly in the Diagnostics and Breast Health segments, to see if the expected earnings growth justifies paying a 16.26 forward P/E multiple. The current valuation is fair, but the stock needs to execute on its growth strategy to move toward that $79.77 price target.

Risk Factors

You're looking at Hologic, Inc. (HOLX) right now, and the biggest, most immediate risk isn't a slow sales cycle or a new competitor-it's the massive strategic shift underway. The definitive agreement for the company to be acquired by funds managed by Blackstone and TPG, announced in October 2025, is the primary near-term risk to your investment thesis.

A deal of this size, valued at up to $79 per share, introduces significant operational and financial uncertainty until it closes. You need to track the risks of potential litigation, unexpected costs, and the chance that the transaction doesn't close on time or at all. Honestly, the distraction this creates for key personnel and management is a defintely real, if unquantifiable, risk to day-to-day business momentum.

Market and External Headwinds

Beyond the acquisition, Hologic faces the classic external pressures of a mature medical technology company. The dramatic drop-off in COVID-19 related revenue is a structural headwind, with diagnostics sales from those assays falling by 27.3% in the fiscal fourth quarter of 2025, totaling only $29.1 million.

The company also deals with geopolitical risks, notably in China, where sales expectations were lowered to only $50 million for the full fiscal year 2025 due to a challenging landscape. Plus, the persistent issue of U.S. tariffs, while being managed, still represents an ongoing cost. Management has taken action to mitigate this, but the company still expects to incur $10 million to $12 million in quarterly tariff expenses.

Here's the quick math on that tariff mitigation:

• Original Quarterly Tariff Estimate: $20 million to $25 million
• Current Quarterly Tariff Expectation: $10 million to $12 million
• Mitigation Strategy: Changes to global supply chain, operating model, and procurement

Operational and Financial Performance Gaps

Looking at the core business, a few financial metrics signal internal challenges that predate the acquisition news. The company has struggled to show organic strength, with constant currency revenue effectively hitting a standstill over the last two years. This suggests the medical device market is getting more competitive, or that Hologic's core segments are nearing saturation.

We also see pressure on capital efficiency. The Return on Invested Capital (ROIC), a key metric for how effectively a company uses shareholder and debt capital to generate profit, has decreased significantly over the past few years. Another concern is the trailing 12-month Free Cash Flow (FCF) margin, which stood at 18.9%. That margin has been dropping, which could signal an intense investment cycle or simply fewer profitable growth opportunities. Cash is king, and you want to see that margin stabilize. For a deeper dive into the company's long-term strategy, check out the Mission Statement, Vision, & Core Values of Hologic, Inc. (HOLX).

The Breast Health segment, which is a major part of the business, showed a decline of 6.9% in the second quarter of fiscal 2025, highlighting an area of operational weakness. Management's plan for this segment involves a new commercial leadership team and a split sales structure for capital equipment and disposable products, aiming for a rebound in the final quarter of 2025.

Key Financial Risk Indicators (Trailing 12 Months, Fiscal 2025 Data)

Your next step is simple: Monitor the acquisition's progress and the Q1 2026 earnings report for any signs that the Breast Health segment turnaround is taking hold. Finance: Model the impact of a 10% tariff increase on the current $10M to $12M quarterly expense by Friday.

Growth Opportunities

You're looking for a clear map of where Hologic, Inc. (HOLX) goes from here, and the answer is simple: the company is doubling down on its core strengths-diagnostics and minimally invasive surgery-while leveraging artificial intelligence (AI) to create a moat. The near-term growth story is a blend of product innovation and strategic tuck-in acquisitions that are already showing returns, plus a major, definitive shift in ownership.

The biggest news is the pending acquisition by Blackstone and TPG for up to $79 per share, reflecting an enterprise value of $18.3 billion, which is expected to close in the first half of 2026. This move, if it closes, fundamentally changes the investment profile from a public growth stock to a private equity-backed entity, but the underlying business drivers remain the same for now. Honestly, the private equity interest is a strong vote of confidence in the long-term value of their technology and market position.

• Product Innovation: The Diagnostics division, a steady revenue engine, is expanding its Panther Fusion system menu, and the new Panther Fusion GI assays received FDA clearance and CE marking in late 2025, enhancing rapid detection of infectious gastroenteritis. In Breast Health, the roll-out of the Genius AI Detection PRO solution in the U.S. is key, building on the Genius AI Detection 2.0 to offer greater accuracy in cancer screening. This AI focus helps clinicians triage cases faster, a huge competitive edge.
• Strategic Acquisitions: Recent acquisitions are fueling growth, particularly in the Surgical segment. The Gynesonics acquisition, with its Sonata system for uterine fibroids, is a major focus. Also, the Endomagnetics (Endomag) acquisition, which brought in breast surgery products like Magseed and Magtrace, contributed nearly $20 million in a recent quarter. These smaller deals are designed to be immediately accretive, meaning they add to earnings right away.
• Market Expansion: International markets are a clear opportunity. The International Surgical business, for example, registered more than 20% growth in the first quarter of fiscal 2025. This is a defintely strong signal that their minimally invasive surgical products, like MyoSure, are gaining global traction, especially as they switch to a direct-sales model in more regions.

Future Revenue and Earnings Outlook

While Hologic, Inc. (HOLX) reported fiscal year 2025 revenues of $4.10 billion, analysts are projecting continued, albeit modest, growth. The full-year revenue guidance was recently revised to a range of $4.05 billion to $4.10 billion due to foreign exchange headwinds and temporary softness in Breast Health capital equipment sales.

Here's the quick math on what analysts are expecting for the next fiscal year, which gives you a sense of momentum:

What this estimate hides is the impact of the new products and acquisitions fully ramping up. The consensus earnings estimate of $4.94 per share for the next fiscal year suggests management's financial discipline is working, as the projected earnings growth of 9.8% is nearly double the projected revenue growth. That's margin expansion at work.

The Competitive Moat: Profitability and Focus

Hologic, Inc. (HOLX)'s competitive advantage (moat) isn't just in its product pipeline; it's in its financial efficiency and market focus. The company's primary focus on women's health is a key differentiator, and they back it up with a strong balance sheet. You can see their commitment in their Mission Statement, Vision, & Core Values of Hologic, Inc. (HOLX).

The company boasts an industry-leading non-GAAP operating margin of 30.0%, significantly higher than the industry average of 20.2%. Plus, their free cash flow conversion stands at 96%, well above the industry average of 80%. This kind of cash generation provides the financial flexibility for the very acquisitions and R&D that keep the growth engine running.

Next Step: Track the closing timeline for the Blackstone/TPG acquisition and look for management commentary on the integration of Gynesonics and Endomagnetics, as that execution is critical to hitting the $4.51 billion revenue target.