Co-Diagnostics, Inc.

CODX Details

Co-Diagnostics, Inc. (NASDAQ: CODX) specializes in molecular diagnostics. It creates, licenses, and sells molecular technologies such as lab systems (MDx devices) and manufactures and sells reagents for tests that rely on nucleic acid molecule detection and analysis.

Latest News:

• Regulatory Clearance: On January 13, 2022, CODX announced that its joint venture CoSara Diagnostics Pvt Ltd, had received approval from the Central Drugs Standard Control Organization (CDSCO) to manufacture and sell in India its SARAQTM Hepatitis B (HBV) Viral Load Kit as an in vitro diagnostic (IVD).

Q3FY21 Results (ended September 30, 2021)

• Robust Increase in Top Line: The company had reported revenue of USD 30.10 million in Q3FY21 compared to USD 21.82 million in Q3FY20, due to sales of its LogixSmart COVID-19 test developed in response to the current COVID-19 pandemic.

(Source: Company's Filing)

 Rise in Operational Income: Due to a significant increase in revenue offset by operating expenses, the company's operating income in Q3FY21 was USD 13.63 million, up from USD 12.04 million in Q3FY20.

• Strong Balance Sheet: As of September 30, 2021, the company has a cash balance of USD 83.91 million with no outstanding debt.

Key Risks:

• Business Risk: The company has a limited commercial history on which to base its prospects, and it is unclear whether it will be profitable in the future.
• Legal Risk: Anti-takeover clauses in the business's charter documents and Utah law may discourage or obstruct a change of control of the firm, influencing the stock price in the future. 

Valuation Methodology: EV/Sales Multiple based Relative Valuation

(Source: Analysis by Kalkine Group)

Stock Recommendation:

Revenue is estimated to be in the range of USD 96 to USD 100 million for the whole year, with diluted earnings per share forecasted to be in the range of USD 1.07 to USD 1.16 for FY21, with roughly 30 million shares outstanding. The stock's 52-week high and low is USD 18.45 and USD 6.48. Considering the correction of 42.44% in the stock price in the past six months, increase in topline, strong balance sheet, optimistic outlook, current valuation, and associated risks, we recommend a "Speculative Buy" rating on the stock at the closing price of USD 6.55, down 5.62% as of February 14, 2022.

CODX's 1-Year Technical Price Chart. (Source: REFINITIV, Analysis by Kalkine Group)

Technical Summary Analysis

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

Note 1: The reference data in this report has been partly sourced from REFINITIV.  

Note 2: Investment decision should be made depending on the investors' appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the valuation has been achieved and subject to the factors discussed above.

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