Hologic to Repurchase Up to $1B of Outstanding Common Stock

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Hologic Stock Fair Value – Hologic($NASDAQ:HOLX), Inc. has announced a stock repurchase program to buy up to $1B worth of the company’s outstanding common stock over five years. The program took effect as of the market close on Sep. 23 following the authorization from the company’s board of directors on the previous day, HOLX said in a regulatory filing. The repurchase program is part of Hologic’s ongoing commitment to creating shareholder value and returning excess cash to shareholders. Hologic has a strong balance sheet and cash flow, and the company believes that repurchasing its own stock is an attractive use of capital.

The stock repurchase program is expected to be accretive to earnings per share and will be funded from existing cash on hand and cash flow from operations. Hologic plans to repurchase shares opportunistically in the open market or in privately negotiated transactions. The timing and amount of repurchases will depend on a number of factors, including market conditions, stock price, and other corporate considerations.

Share Price

The repurchases will be made from time to time on the open market or in privately negotiated transactions, subject to market conditions, applicable legal requirements and other factors. This move comes as positive news for Hologic, which has seen mostly positive news lately. On Monday, Hologic stock opened at $63.1 and closed at $63.7, up by 1.1% from prior closing price of 63.0. This repurchase is a signal of the company’s confidence in its stock and its ability to generate value for shareholders.

VI Analysis – Hologic Stock Fair Value

HOLOGIC’s fundamentals reflect its long term potential. The intrinsic value of HOLOGIC shares is around $76.1, calculated by VI Line. Now HOLOGIC stock is traded at $63.7, a fair price that is undervalued by 16%.

Summary

“The expansion of our share repurchase program reflects our continued confidence in the long-term growth prospects for our business and our commitment to creating shareholder value,” said Steve MacMillan, Hologic’s Chairman, President and Chief Executive Officer. “repurchasing our stock at current levels represents an attractive use of our capital and underscores our confidence in our ability to generate significant cash flow and generate strong returns for our shareholders.” The timing and amount of share repurchases will be determined based on a variety of factors, including market conditions, stock price, and other corporate considerations. The share repurchase program will be funded with cash on hand and cash generated from operations. The program has no time limit and may be suspended for periods or discontinued at any time.