Medical equipment provider Hologic, Inc. (HOLX) recently delivered better-than-expected fourth-quarter results. During this period, higher revenue in the Breast Health category made up for a decline in the Diagnostics segment (excluding blood).
Let us look at the changes in HOLX’s key risk factors that investors should know.
Risk Factors
According to the TipRanks Risk Factors tool, Hologic’s top risk category is Finance & Corporate, accounting for 27% of the total 33 risks identified. In its recent quarterly report, the company has removed one and changed seven key risk factors.
HOLX removed a risk factor associated with employing additional resources to its Diagnostics business amid the COVID-19 pandemic. There is high demand for HOLX’s COVID-19 assays and Panther systems on which the assays run. HOLX had made higher resource allocations to scale up production, which could adversely impact the company’s other development programs or production facilities.
HOLX has also changed seven risk factors. It highlighted that its long-term success will depend on its ability to integrate acquisitions and execute business development activities. HOLX functions in a highly regulated industry. Any failure to obtain regulatory clearances or approvals for the company’s current or newly developed products and services, or service enhancements could negatively impact HOLX.
Furthermore, HOLX’s product manufacturing is concentrated in one or a few locations. The company relies on a single laboratory facility to process each of its Biotheranostics gene expression tests for breast cancer. Interruptions, delays, or shutdowns of manufacturing or laboratory facilities amidst the COVID-19 pandemic could harm the company.
HOLX also noted that its diagnostics segment relies on a small number of customers for a large portion of its sales, and losing any of these customers or a purchase cancel could substantially lower the revenue of this segment.
Lastly, the company also highlighted risks from the worldwide political and social uncertainty, tariffs, social tensions, economic disruptions, and supply chain constraints induced by the COVID-19 pandemic. These factors could impact HOLX, its financials, and manufacturing. (See Insiders’ Hot Stocks on TipRanks)
Against a sector average of 5%, HOLX’s Macro & Political risk factor at 12%. Shares have gained 17.3% over the past six months.
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