WARNING: Market Shock Imminent

Join us on September 29 at 4 p.m. ET at the Market Shock 2022 event to find out what’s coming and how to profit.

Thu, September 29 at 4:00PM ET

The Top Reasons to Consider Co-Diagnostics Stock

The last time I weighed in on Co-Diagnostics (NASDAQ:CODX), the stock traded at $18.15.

CODX Stock
Source: Shutterstock

Nowadays, the CODX stock is up to $22, and could run higher with novel coronavirus cases on the rise, and a desperate need for diagnostic tests.

With surging demand straining supply, Congress may soon consider legislation to ensure there are enough tests.

In fact, according to former U.S. FDA Commissioner Scott Gottlieb, and Dr. Mark McClellan, director of the Duke-Margolis Center for Health Policy:

“Washington could contract with commercial labs and point-of-care test manufacturers to develop and maintain diagnostic capacity for a crisis. Think of it as part of the national stockpile. Under such contracts, companies would build more labs and sprinkle them throughout the country so capacity could be available wherever it’s needed.”

Demand issues could skyrocket even more when some colleges go back in the fall. In fact, many schools and universities are planning to regularly test students and staff on campuses across the U.S. to help keep everyone safe.

According to Co-Diagnostics CEO Dwight Egan, in the U.S. there are more than 76 million students that need to be in school, and nearly 157 million people that need to get to work. All will most likely need to be tested to get into school or work.

The Coronavirus Is Only Getting Worse

Unfortunately, there doesn’t seem to be an end in sight to the coronavirus pandemic.

At the moment, the global number of cases is up to 17 million with 667,000 deaths.

  • The U.S. is beyond 4.5 million cases
  • Brazil has 2.5 million cases
  • India has 1.5 million cases
  • Russia is up to 830,000 cases
  • South Africa is now up to 470,000 cases

According to World Health Organization chief Tedros Adhanom Ghebreyesus, the situation is going to get worse. “I want to be straight with you: there will be no return to the ‘old normal’ for the foreseeable future. Let me blunt: too many countries are headed in the wrong direction.”

More Tests are Desperately Needed

Earlier this year, Co-Diagnostics received security clearance for its Logix Smart Coronavirus test, which it has already received a good deal of orders for, according to Egan.

“The Logix Smart COVID-19 test design and underlying technology has become an important part of the fight against the pandemic in many parts of the world, and was the driver of Company revenue in the first quarter. Following FDA emergency use authorization being granted just 3 days into the second quarter, orders for our test expanded even more vigorously. As of the mid-point in the second quarter we have significantly exceeded the second quarter estimates of analysts covering the Company, and we are pleased to announce that we are already solidly profitable for the second quarter based on results to date.”

Thanks to these tests, the company reported Q1 revenue of $1.5 million. Gross margins were up to 71.5%. It also recorded Covid-19 test and equipment sales of more than $18 million year to date.  Plus, it received orders in nearly 50 countries and 15 states.

“We have positioned the company to continue to make an important contribution in meeting the enormous demand for tests around the world,” Egan said.

The Bottom Line on CODX Stock

With the coronavirus still making its way around the world, and a desperate need for more test kits, Co-Diagnostics could continue to trend higher. Plus, should Congress push forward with legislation to produce greater supply of tests, CODX could be a top beneficiary.

In the near term, I’d like to see the CODX stock closer to $28 a share.

Ian Cooper, an InvestorPlace.com contributor, has been analyzing stocks and options for web-based advisories since 1999. As of this writing, Ian Cooper did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media, https://investorplace.com/2020/07/codx-stock-the-top-reasons-to-consider-co-diagnostics-stock/.

©2022 InvestorPlace Media, LLC