SUMMARY
The weekly updates of the 3D Tomo-Tracker have remained on a slow pace for the last several weeks, pulling away from the s-curve forecast. As a reminder, the s-cuve forecast already drives our Breast Health revenue estimate below consensus, particulalry in 2017. In order to minimize the variance between the actual and estimated adoption curves, we will at some point either see a significant pick up in placements, or change the s-curve inputs. Changing the s-curve inputs will not just lower our 3D Product revenue estimate for F3Q16, but for the subsequent quarters through 2017.
REVENUE SCHEDULE
By combining both Hologic's recent changes to their revenue reporting by segment and product line with data we have previously gathered from filings and transcripts, we built what we believe is a reasonable estimate of revenue for both 3D and 2D mammography. The analysis provides a framework which we believe may more acturately reflect the 3D Tomo-Tracker facility data. At 75 new facilities QTD, actual updates are falling well short of the s-curve derived 368 facilites expected which translates into 3D product revenue directly. Assuming the slow 3D placement trend continues through the end of June, we would expect 3D product revenue to come under pressure, as well as gross margins.
Please call or e-mail with any questions.
Thomas Tobin
Managing Director
@HedgeyeHC
Andrew Freedman
Analyst
@HedgeyeHIT
