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Co-Diagnostics (CODX) to Post Q3 Earnings: What's in Store?

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Co-Diagnostics, Inc. (CODX - Free Report) is expected to release third-quarter 2020 results in the early weeks of November.

In the last reported quarter, the company delivered a negative earnings surprise of 29.5%. Further, it missed estimates in each of the trailing four quarters, the average negative surprise being 26.1%.

Q3 Estimates

For the third quarter, the Zacks Consensus Estimate for revenues is pegged at $28 million, suggesting significant growth from the prior-year quarter. The same for earnings per share stands at 54 cents.

Factors to Note

Co-Diagnostics has been increasing production capacity to cater to rising demand for its COVID-19 tests. Hence, the company’s third-quarter revenues are likely to reflect increase in COVID-19 test sales. This, in turn, is likely to have benefited the company’s performance in the to-be-reported quarter.

Further, sales of Logix Smart COVID-19 test kits might have contributed to expansion in gross margin.

CoDiagnostics, Inc. Price and EPS Surprise

CoDiagnostics, Inc. Price and EPS Surprise

CoDiagnostics, Inc. price-eps-surprise | CoDiagnostics, Inc. Quote

On Sep 8, 2020, Co-Diagnostics inked a deal with Arches Research, Inc. in order to expand the latter’s COVID-19 testing services by utilizing the former’s Logix Smart COVID-19 test kit. The deal is likely to offer more opportunities for sales of additional molecular diagnostic products in Co-Diagnostics’ development pipeline.

On Aug 3, 2020, the company’s partner, Clinical Reference Laboratory (CRL), obtained FDA Emergency Use Authorization (EUA) for CRL Rapid Response, which is a saliva-based COVID-19 test. The test can easily be self-administered at home, work or any other setting and then tested using Co-Diagnostics’ patented CoPrimer technology.
On Feb 24, 2020, Co-Diagnostics became the first company in the United States to receive CE marking for COVID-19 test kit.

Moreover, on Apr 6, 2020, the company received FDA EUA for its Logix Smart COVID-19 test.

The company has also received COVID-19 test orders from public and private organizations in about 50 countries and over 25 states in the United States.

These positive developments are likely to get reflected in the company’s third-quarter results.

However, the company may have experienced a rise in operating expenses, which in turn might have weighed on the to-be-reported quarter’s performance.

What Our Quantitative Model Suggests

Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here as you will see.

Earnings ESP: Co-Diagnostics has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Co-Diagnostics carries a Zacks Rank #4 (Sell).

Peer Releases

Some better-ranked stocks in the broader medical space that have already announced their quarterly results are Thermo Fisher Scientific Inc. (TMO - Free Report) , Align Technology, Inc. (ALGN - Free Report) and AngioDynamics, Inc. (ANGO - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Align Technology reported third-quarter 2020 adjusted EPS of $2.25, which surpassed the Zacks Consensus Estimate by 281.4%. Revenues of $734.1 million outpaced the consensus mark by 38%.

Thermo Fisher reported third-quarter 2020 adjusted EPS of $5.63, beating the Zacks Consensus Estimate by 28.8%. Revenues of $8.52 billion surpassed the consensus mark by 10%.

AngioDynamics reported first-quarter fiscal 2021 adjusted EPS of 2 cents against the Zacks Consensus Estimate of a loss per share of 6 cents. Revenues of $70.2 million beat the consensus mark by 6.9%.

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