CODX stock has been a nice winner this year for our readers and subscribers. We initiated coverage in March when CODX stock was under $10 and before it ran to $30. Now CODX stock has backed off and we are taking a look at the potential for the stock to run back to the highs.
About CODX Stock
First up, here’s a little background info for those that aren’t familiar with CODX stock. Co-Diagnostics, Inc., a Utah corporation, is a molecular diagnostics company that develops, manufactures, and markets a new, state-of-the-art diagnostics technology.
The Company’s technology is utilized for tests that are designed using the detection and/or analysis of nucleic acid molecules (DNA or RNA). The Company also uses its proprietary technology to design specific tests to locate genetic markers for use in industries other than infectious disease and license the use of those tests to specific customers.
Co-Diagnostics COVID-19 Test
What got the market excited earlier this year about CODX stock was that Co-Diagnostics’ COVID-19 test showed 100% sensitivity and 100% specificity, the metrics used to define accuracy in molecular diagnostics testing. The data released came from independent evaluations of the performance of the Company’s COVID-19 test in the field. These evaluations include the India National Institute of Pathology, the Mexican Department of Epidemiology (“InDRE“), and others in the US and abroad. Each study concluded 100% concordance for both specificity and sensitivity.
Co-Diagnostics has manufactured over 6M tests to date and has ordered components to make 20M more. COVID-19 test and equipment sales were over $18M year-to-date (unaudited). The company has received orders from almost 50 countries and over 15 U.S. states.
CODX stock patented CoPrimer™ platform is designed to rapidly generate unique testing solutions. Co-Diagnostics is able to do what other labs cannot because it has the most advanced primer technology on the market. CoPrimers reduce primer-dimers by 2.5 million times relative to standard PCR primers and probes. This allows for a more stable single-marker, single-well test that is lower cost, higher throughput, and easier to use/analyze.
Not All COVID-19 Tests Are As Good As Co-Diagnostics’
Back in May, Abbott Labs got some bad press over its COVID-19 test. According to an NYU study and regardless of method of collection and sample type, Abbot ID NOW COVID-19 missed a third of the samples detected positive by Cepheid Xpert Xpress when using NP swabs in VTM and over 48% when using dry nasal swabs. This is a huge disappointment for Abbott and puts the company way behind Co-Diagnostics when it comes to COVID-19 testing.
PolarityTE subsidiary, Arches Research has entered into a strategic partnership with Co-Diagnostics to expand COVID-19 testing operations.
Under the agreement, Arches will provide COVID-19 testing for customers referred by Co-Diagnostics and, to support additional demand, the latter will provide testing equipment in exchange for a commitment to using only Co-Diagnostics’ tests on the equipment.
Arches has previously been performing COVID-19 testing using CODX’s Logix Smart COVID-19 test kit.
Reasons To Be Bullish On CODX Stock
There are a number of reasons to be bullish on CODX stock.
- Maxim Group has a price target on the stock of $30.
- H.C. Wainwright has a price target of $35.
- Beyond COVID-19 testing, other infectious diseases and molecular diagnostic applications are an important area of focus for CODX stock and will be a key driver of revenue growth over the longer term. Primary initiatives in infectious disease (including Indian CDSCO IVD-cleared tests for TB, hepatitis B, hepatitis C, malaria and HPV, and a CE-marked multiplex for Zika/dengue/chikungunya), along with AgriBio and mosquito vector products, all provide opportunities for the Company now and in the future.
- In anticipation of future testing needs, Co-Diagnostics is developing a multiplex panel to differentiate between the COVID-19 virus and other upper respiratory pathogens.
- Co-Diagnostics remains debt-free, with a solid balance sheet, and with revenues that have enabled the company to achieve year-to-date net profit by May 14, 2020.
- The need for testing on a mass scale continues to grow, as the U.S. and countries around the world strive to create COVID-safe schools, COVID-safe workspaces, and COVID-safe communities. In the United States for example there are more than 76 million students that need to be in school this fall along with 157 million workers who need to be at work.
Currently trading with a market cap of $370 million, it’s not a matter of if CODX stock will hit $30 again, but when. We have also speculated that Abbott Labs or another big pharma player could buy Co-Diagnostics to plug holes in their testing capabilities. Overall, the need for testing is urgent and hundreds of millions of tests need to be done. Do the math and with or without a buyout, there’s a lot of money to be made in CODX stock.
As always, good luck to all (except the shorts)!
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Disclosure: We have no position in NASDAQ:CODX or any of the securities mentioned. We wrote this article ourselves and it expresses our own opinions. We are not receiving compensation for it. We have no business relationship with any company whose stock is mentioned in this article. Insider Financial is not an investment advisor and does not provide investment advice. Always do your own research and make your own investment decisions. This article is not a solicitation or recommendation to buy, sell, or hold securities. This article is meant for informational and educational purposes only and does not provide investment advice.