Simple Concepts Research Group

Will The Momentum Continue For Co-Diagnostics (NASDAQ: CODX)?

by | Mar 21, 2022 | 52 Week Lows, Stock Picks

co diagnostics codx stock valuation

Co-Diagnostics, Inc. (CODX) Company Overview & Stock Price Forecast

This article provides a brief analysis and stock rating for Co-Diagnostics, Inc (CODX) including an updated stock price target. Additional data on the company’s earnings yield, price/earnings ratio, return on invested capital and YTD performance are discussed as well.

Co-Diagnostics Fundamentals

CODX Stock Rating

Stock Price Target: $11.37

In the section below, we discuss the earnings yield, P/E, return on invested capital and YTD performance for Co-Diagnostics in comparison to the Healthcare Products industry and the S&P 500.

Co-Diagnostics is a Small Cap company with a Market Cap of $191.3M.

How are investors using Co-Diagnostics earnings yield to assess the company?

Co-Diagnostics (CODX)_ Earnings Yield in Comparison to the Healthcare Products Industry, S&P 500 and 10 Year Treasury Rate

The earnings yield is used to show the percentage of a company’s earnings per share. Investors typically use earnings yield to determine which assets are underpriced or overpriced relative to other variables, like sector, industry or bond yields. Simply put, the earnings yield of a company can be used to assess how expensive a company is in relation to the earnings that are generated. When valuing companies, the SIS Research Group does not utilize the inverse P/E ratio to calculate the earnings yield. Instead, we use an adjusted earning yield calculation to capture variation amongst companies (i.e. debt and tax rates).

The current earnings yield for Co-Diagnostics is 19.65%, in comparison to 3.93% for the S&P 500 and -0.72% for the 10-year treasury bond. The median earnings yield for the Healthcare Products industry is 4.14%.

What does Co-Diagnostics Price-to-Earnings Ratio (P/E) tell investors about the company?

Co-Diagnostics (CODX)_ Price-to-Earnings, Price-to-Sales and Price-to-Book Value in Comparison to the Healthcare Products Industry and the S&P 500

The price-to-earnings ratio (P/E) is a relatively popular metric used by investors and analysts for valuing a company’s stock. The P/E ratio can be used to show how a stock’s valuation compares to other companies and the total market. Investors use the P/E ratio to determine what the market is willing to pay today based on a company’s past or future earnings. A high P/E ratio could mean that a stock’s price is too high relative to earnings, which could be a signal that a stock is currently overvalued. In turn, a low P/E ratio could indicate that a company’s current stock price is low relative to earnings. 

Co-Diagnostics is currently trading at a P/E of 4.60. The P/E for the Healthcare Products industry is 49.36 and the P/E for the S&P 500 is 25.45.

What is the current Price-to-Sales Ratio (P/S) for Co-Diagnostics?

The Price-to-Sales Ratio (P/S) looks at a company’s market cap and revenue to determine valuation. The P/S ratio is calculated by taking a company’s market cap and dividing by the total sales or revenue. The P/S ratio gives an idea of how much the market values every dollar of a company’s sales and can be effective in valuing unprofitable growth stocks or companies that are currently undergoing special situations or challenges. A lower the P/S ratio can be an indicator of good value.

Co-Diagnostics is currently trading at a P/S of 2.46. The P/S for the Healthcare Products industry is 6.67 and the P/S for the S&P 500 is 2.95.

How does Co-Diagnostics Price-to-BookRatio (P/B) compare to the Healthcare Products industry?

Price-to-book value (P/B) is the ratio of the market value of a company’s shares divided by its book value of equity (the value of it’s assets on the books). The book value is the difference between the book value of assets and liabilities. Typically, investors use the P/B ratio to assess if a stock is valued properly (a value of one means that the stock price is trading in line with the book value of the company). A company with a high P/B ratio could mean the stock price is overvalued as well as the converse.

Co-Diagnostics P/B ratio is 2.80. The P/B for the Healthcare Products industry is 6.30 and the P/B for the S&P 500 is 4.54.

How attractive is Co-Diagnostics Return on Invested Capital (ROIC) to investors?

Co-Diagnostics (CODX)_ Return on Invested Capital in Comparison to the Healthcare Products Industry and the S&P 500

Investors use the return on invested capital (ROIC) to assess how efficient a company is at turning capital into profits. The ROIC is the amount of money a company makes on it’s investments that is above the average cost of debt and equity.

Investors can use the ROIC to provide context for metrics like the (P/E) ratio. For instance, when used in isolation a low P/E ratio could suggest a company is oversold but the decline could be because a company is no longer generating value for shareholders. Conversely, companies that consistently generate high rates of ROIC can plausibly trade at a premium compared to other stocks, even if their P/E ratios are high.

Co-Diagnostics ROIC is currently 54.88% in comparison to 6.36% for the Healthcare Products industry and 9.10% for the S&P 500.

Co-Diagnostics (CODX)_ Price Target & 52-Week Price Range

How has CODX stock performed over the past year? What is the current analyst price target?

Over the past 52 weeks, Co-Diagnostics has traded between the range of $5.00 and $14.97.

The current Analyst Price Target for Co-Diagnostics is $11.37.

What is Co-Diagnostics YOY Performance in comparison to its industry and the total market?

The YOY performance for Co-Diagnostics is -53.38%. The Healthcare Products industry has a YOY performance of 10.07% in comparison to the YOY S&P 500 performance of 12.36%.

Co-Diagnostics (CODX)_ YOY Performance in Comparison to the Healthcare Products Industry and the S&P 500

Recent Financial Results (Q3, 2021)

  • Revenue increased 38.0% as compared to the prior year period to a record $30.1M, primarily due to sales of the Logix Smart COVID-19 Test
  • Gross profit increased 67.5% to $26.8M, representing 89.0% of consolidated revenue due to improved product mix as compared to the prior-year period
  • Operating income totaled $13.6M, representing a 13.2% increase from the prior year
  • Income before taxes of $13.6M, compared to $12.8M in the prior year period
  • Net income of $11.5M, compared to a net income of $15.7M in the prior-year third quarter
  • Cash, cash equivalents, and marketable securities totaled $83.9M as of September 2021
  • Operating cash flows totaled $36.2M for the year-to-date period ending September 2021, as compared to operating cash flows of $8.2M during the prior year period

Stock Price Target: $11.37

Company Overview

CODX Stock Rating

Co-Diagnostics, Inc., a molecular diagnostics company, develops, manufactures, and sells reagents used for diagnostic tests that function through the detection and/or analysis of nucleic acid molecules.

The company also provides tests that identify genetic traits in plant and animal genomes. In addition, it intends to sell diagnostic equipment from other manufacturers as self-contained lab systems. The company was incorporated in 2013 and is headquartered in Salt Lake City, Utah. The current CEO is Dwight Egan.

Be sure to add Co-Diagnostics (CODX) to your Watch List and if you haven’t done so already, check in on the performance of our Current Portfolio. Keep it simple and always do your due diligence.

This material is provided for informational purposes only and is not financial advice. The information contained herein should not solely be used for the formation of an investment decision, whether you are a long term or short term investor.