Hologic's SculpSure Body Contouring Treatment Scores Distribution Win

The hair and skin cosmetic procedure provider LightRx Face & Body announced a partnership Tuesday in which it will provide Hologic, Inc. HOLX's SculpSure non-invasive laser body contouring treatment at its 80 nationwide locations. 

The Analyst

Evercore ISI analyst Vijay Kumar has an Outperform rating on the shares of Hologic and $42.50 price target.

The Thesis

Assuming one system per center and a pricing of $175,000 per system, the deal could translate into a $14-million revenue opportunity for Hologic, Kumar said in a Tuesday note. (See the analyst's track record here.) 

The deal is a huge win for Hologic, as it mitigates concerns that products from Cynosure, which the company acquired in March 2017, are not competitive, the analyst said. 

"With sentiment on HOLX at an all-time low, today's announcement provides one of the first proof points that the CYNO deal was the right move for HOLX despite the painful transition for the past 12 months," Kumar said. 

Evercore expects the stock to react positively to the announcement. Depending on Hologic's second-quarter print, a rebound could materialize as investors gain incremental confidence in Cynosure, the analyst said. Hologic is set to report Q2 results May 2.

"Lastly, recall [Cynosure division president] Kevin Thornal was appointed to turn around this business — today's announcement should provide comfort that HOLX is getting the right leadership in place," Kumar said.

The Price Action

Hologic shares have shed roughly 12 percent year-to-date through Monday.

The stock was up 2.55 percent at the time of publication Monday at $38.65.

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Photo courtesy of Hologic.