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Co-Diagnostics earns Buy rating, $5 price target from Maxim after releasing coronavirus test

Analysts at Maxim more than doubled the company's price after sales of its coronavirus test began in China

Sprouts growing from stacks of quarters leading to a jar of quarters
Maxim tagged the company with a Buy rating and increased its price target to $5

Co-Diagnostics Inc (NASDAQ:CODX) has caught the eye of analysts at Maxim Group as it moves ahead with its coronavirus diagnostic test. 

Maxim tagged the company with a Buy rating and increased its price target to $5 from $2, citing the speed at which Co-Diagnostics developed a detection test for the virus and its subsequent first sales in China.

“[The speed of development] highlights not just the platform's versatility, but also CDI's ability to produce tests in a time efficient manner as future threats emerge,” Maxim wrote. “We saw this with the Zika test and other viral tests from CDI.”

READ: Co-Diagnostics makes coronavirus diagnostic test available to researchers

The firm also noted Co-Diagnostics’ viral testing manufacturing facilities in India through its joint venture with CoSara Diagnostics.

Additionally, the Utah-based company recently boosted its balance sheet, raising roughly $15 million in two equity financings in January. The move “extended the company’s cash runway well into 2021, positioning it to unlock value in its commercial-stage infectious diseases testing platform.”

“We factor in dilution, roll our metrics forward to 2020, and lower the risk adjustment in our commercial model to 30%, from 75%,” Maxim wrote. “The net result raises our 12-month price target to $5 from $2.”

The coronavirus has killed at least 1,873 people and infected more than 72,000, according to CNN.

Contact Andrew Kessel at [email protected] 

Follow him on Twitter @andrew_kessel

Quick facts: Co-Diagnostics

Price: 9.15 USD

NASDAQ:CODX
Market: NASDAQ
Market Cap: $227.98 m
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