Co-Diagnostics Inc (CODX)

[Opti Mist]

New analyst target of $36/share.

Action Summary – 21 May 2020
Analyst Theodore R. O’Neill – Gaining share in a $52 billion market

Summary:

• The company reported a significant uptick in revenue for the quarter and met consensus EPS estimates. It reported a loss of $0.05 per share meeting consensus on $1.55MM of revenue. Consensus revenue expectation was $0.6MM. We had expected $0.1MM in revenue a loss of $0.08. Revenue was 158% more than consensus due to demand for its COVID-19 testing kits and equipment sales. The company met consensus EPS due to higher sales, higher margins, and lower other expenses offset by higher operating expenses.

• We believe its U.S. addressable market for COVID-19 tests is worth $52 billion. We now believe that demand for tests will exceed 5 billion per year in the U.S. This is a combination of employed individuals, students, and others who would require testing every week in order to control future breakouts. We anticipate approximately 100 million individuals will need the test and that gets us to 5.2 billion tests. And at nominal $10/test, the market would reach $52B.

• We have raised our 2020 and 2021 estimates from an EPS loss of $0.28 on $4.1MM of revenue and an EPS loss of $0.03 on $28MM of revenue, respectively to an EPS gain of $1.42 on $83MM of revenue and an EPS gain of $1.20 on $89MM of revenue.

• Following the increase in earnings estimates we are reiterating our Buy rating and raising our price target to $36 from $18


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