Whether you’re a bull or a bear, there’s no denying that 2020 has been a banner year for Co-Diagnostics (NASDAQ:CODX) stock. The price action reflects a frenzy of trading activity in the wake of the novel coronavirus outbreak.
The moderate pullback in CODX stock since mid-May is understandable. After all, shares were under $1 at the beginning of the year and reached $23 pricing by May 13, an astonishing gain.
Moreover, the mild retracement in CODX stock price hasn’t dissuaded some analysts from raising their price targets. But higher price targets aren’t necessarily positive news on their own.
There needs to be a justification for the optimistic outlook. Current and prospective shareholders should know that there are valid reasons to maintain a bullish stance on the stock.
As long as there’s a need for Covid-19 testing, there remains a compelling rationale for holding CODX in anticipation of higher prices.
CODX Stock Has Been Thrust into the Limelight
The trading community, to be honest, didn’t pay much attention to Co-Diagnostics before 2020. Sure, some people had their opinions on the stock, but there wasn’t much press or fanfare surrounding it.
That changed quickly with the outbreak of the novel coronavirus. The need for test kits became a major refrain from the medical community. It got to the point that the U.S. government got involved in the effort to get coronavirus testing to the public as fast as possible.
On April 3, the Food and Drug Administration granted emergency use authorization for Co-Diagnostics’ Covid-19 test kit, the green light for the company to ramp up its production of these kits. And in the first quarter of 2020, Co-Diagnostics generated $1.5 million in revenues as the company ramped up its test-kit production.
In short, Co-Diagnostics was an overnight sensation. That’s a slight exaggeration, but the numbers suggest astonishing growth for this formerly under-the-radar company. So far, Co-Diagnostics reports that it has manufactured 6 million of its Covid-19 test kits.
As a result, the company has recorded test and equipment sales totaling more than $18 million year-to-date through the middle of the second quarter. Today, Co-Diagnostics is fulfilling test kit orders for nearly 50 countries around the world.
A Spate of Upgrades For Co-Diagnostics
As we might expect, Co-Diagnostics’ turn in the limelight hasn’t gone unnoticed by the analyst community. Besides, it’s not unusual for the experts to weigh in on a stock after it has a sharp run-up.
The days of $1 and $2 price targets on CODX stock are seemingly long gone. But in envisioning the future, we have to look at the current trajectory of the shares. Sure, there’s been a pullback since mid-May, but that could be just another chance to own the shares at a more favorable price point.
So, where is CODX headed? Analysts at Maxim Group evidently see plenty of upside ahead, as they’ve upgraded the stock from a “hold” to a “buy,” further assigning an ambitious price target of $30. With that, the analysts called Co-Diagnostics’ Covid-19 test kits “transformative for the company.”
H.C. Wainwright also gave CODX stock a “buy” rating. However, that firm’s price target is even more optimistic at $35. Not to scare you, but H.C. Wainwright explained that “a potential second wave of COVID-19 in the coming fall/winter season may demand testing throughout the year into 2021.”
An even higher price prediction was set by Litchfield Hills Research, who set their target at $36. That firm expects that, in order to prevent future Covid-19 breakouts, around 100 million people will have to be tested every week.
The Final Word on CODX Stock
As you can see, different analysts have different reasons for leaning bullish on CODX stock. But really, the best reason is that the share price doesn’t fully reflect the incredible growth of this company as Co-Diagnostics continues to help the world in the battle against Covid-19.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.