Analysts at Wainwright reiterated their “Buy” rating on Co-Diagnostics Inc (NASDAQ:CODX) as US domestic coronavirus cases surged boosting demand for the company's coronavirus (COVD-19) diagnostic test.
“As reported in the Wall Street Journal yesterday, the COVID-19 testing system is reaching the brink in the US as growing demand surpasses what the nation’s labs can handle, resulting in supply shortages and backlogs,” wrote Wainwright analysts Yi Chen and Raghuram Selvaraju.
“Outside the US, Brazil, India, and South Africa are registering the greatest rises in COVID-19 cases, according to the United Nations health agency. Therefore, 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.”
In addition, the large India market is serviced by the Utah-based company's joint venture, CoSara, with manufacturing facilities located in India. The analysts noted that sales of CoSara have yet to be integrated into the company’s topline revenue.
According to the analysts, the company had approximately $100 million worth of tests in mid-May that were slated to be shipped.
“In the wake of the accelerating COVID-19 spread, we reiterate our ‘Buy’ rating and $35 price target,” said the analysts.
Wainwright also pointed out that the company’s Logix Smart COVID-19 test’s high accuracy has been independently validated by PathWest Laboratories in Australia, the Indian National Institute of Pathology, and the Mexican Department of Epidemiology.
Co-Diagnostics' stock, which has been one of the hottest on Wall Street during the last two months, recently rose 1.51% to $18.46 in afternoon trading.
Contact the author Uttara Choudhury at [email protected]
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