Co-Diagnostics: Soaring Demand for COVID-19 Test Kits Could Propel the Stock Even Higher

A stock with a 6-month gain of over 1500% is normally certain to raise some eyebrows. But, “normally” is a long distance away from the current reality, and that figure is the upside posted by shares of molecular diagnostics player Co-Diagnostics (CODX) since the turn of the year.

While certainly not common place, these massive gains are not completely out of the ordinary in 2020, although primarily reserved for one specific group of stocks: those in the hunt for coronavirus related solutions.

And CODX belongs squarely in that group. Actually, that’s not quite on point - Co-Diagnostics already has a solution, in the shape of its Logix Smart COVID-19 test.

The U.S. has seen an explosion of new infections in several states, as the rush to re-open the economy has backfired. The record number of COVID-19 cases reported over the last few days signal that there is no end in sight to the pandemic just yet.

H.C. Wainwright analyst Yi Chen believes this will result in a growing need for Co-diagnostics’ test kit.

The 5-star analyst noted, “What is clear now is that testing demand has been steadily increasing and is likely to continue to remain at a substantial level in the coming quarters, in our view. In fact, as reported in the Wall Street Journal yesterday, the COVID-19 testing system is reaching the brink in the U.S. as growing demand surpasses what the nation’s labs can handle, resulting in supply shortages and backlogs.”

“Therefore,” Chen concludes, “we believe Co-Diagnostics should continue to ship a high volume of its Logix Smart™ COVID-19 test kits, with an increasing volume shipped to U.S. customers.”

Accordingly, Chen rates CODX shares a Buy along with a $35 price target. There is potential for nearly 100% upside, should the figure be met in the year ahead. (To watch Chen’s track record, click here)

In the last 3 months, two of Chen’s colleagues have also chipped in with a view on the diagnostics specialist’s prospects, both recommending a Buy. CODX 's Strong Buy consensus rating is backed by a $33.67 average price target and implies shares will appreciate by a hefty 93% in the next 12 months. (See Co-Diagnostics stock analysis on TipRanks)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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