Regulatory Approvals And Launches Will Expand Decentralized Healthcare Access

Key Takeaways

• Entry into high-need global markets and decentralized testing supports sustained growth, recurring revenue, and broader healthcare impact through advanced diagnostic solutions.
  
• Proprietary platforms and strategic partnerships drive customer retention, efficiency, and market penetration while mitigating financial risks during commercialization.
  
• Significant commercial, regulatory, and financial risks threaten Co-Diagnostics' ability to achieve sustainable revenue growth and maintain competitiveness amid heavy reliance on future platform launches.

Catalysts

Operates as a molecular diagnostics company that develops, manufactures, and sells reagents used for diagnostic tests that function through the detection and/or analysis of nucleic acid molecules in the United States and internationally.

• Anticipated regulatory approvals and commercial launches of multiple advanced molecular diagnostic tests-including COVID-19, multiplex respiratory, tuberculosis, and HPV panels-target large, underserved global markets with growing healthcare needs, supporting significant revenue growth and market share gains.
  
• Expansion into point-of-care and at-home diagnostic solutions enhances accessibility, aligns with the broader trend toward decentralized healthcare, and enables higher-frequency testing and recurring revenues, positively impacting both top-line growth and gross margins.
  
• Strategic focus on high-burden infectious diseases in emerging markets such as India and Africa, combined with partnerships (like CoSara Diagnostics) and grant-backed development, positions the company to benefit from rising investments in global health infrastructure-driving long-term volume growth and revenue diversification.
  
• Development of a proprietary, cloud-connected PCR platform and integrated software ecosystem fosters customer retention and the potential for higher-margin recurring revenues as clients become locked into the platform, supporting sustainable improvements in net margins over time.
  
• Near-term increases in operational efficiency and cost savings, along with ongoing grant funding for R&D, are helping to manage cash burn and maintain balance sheet health during the pre-commercialization phase, which should enable the company to scale effectively without excessive dilution and position for future earnings growth.

Co-Diagnostics Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Co-Diagnostics's revenue will grow by 186.1% annually over the next 3 years.
• Analysts assume that profit margins will increase from -1025.3% today to 11.8% in 3 years time.
• Analysts expect earnings to reach $9.7 million (and earnings per share of $0.11) by about August 2028, up from $-35.9 million today.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 27.9x on those 2028 earnings, up from -0.2x today. This future PE is lower than the current PE for the US Medical Equipment industry at 28.0x.
• Analysts expect the number of shares outstanding to grow by 5.65% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.97%, as per the Simply Wall St company report.

Co-Diagnostics Future Earnings Per Share Growth

Risks

• The company currently generates minimal revenue ($0.2 million in Q2 2025) and is operating at a significant net loss ($7.7 million in Q2 2025), relying heavily on grants, additional financing, or equity raises to fund operations-posing a material risk to future earnings and shareholder value if commercial launches are delayed.
  
• Co-Diagnostics' product pipeline is still pre-commercial, dependent on successful completion of multiple clinical trials and various regulatory approvals (FDA, CDSCO, SAHPRA), and any delays, failures, or extended approval timelines could push out or impair future revenue streams and further increase operating costs.
  
• Heavy reliance on new platform launches in highly competitive markets (PCR-based COVID-19, respiratory, TB, and HPV testing), without significant existing commercial revenue diversity, exposes the company to concentration risk and means any adverse market, regulatory, or technological development could severely impact future top-line growth.
  
• Plans for international expansion, especially in India and Africa, face risks related to execution in complex regulatory environments, reliance on the CoSara joint venture for manufacturing and commercial infrastructure, and potential geopolitical or market access challenges-all of which may impact revenue predictability and margin realization.
  
• The current business model anticipates commercialization in point-of-care and at-home settings, but potential pricing/reimbursement pressures, shifting regulatory/compliance demands (especially around data privacy), and rapid technological advances by larger or more diversified competitors could erode Co-Diagnostics' market share, gross margins, and long-term competitiveness.

Valuation

• The analysts have a consensus price target of $5.5 for Co-Diagnostics based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $10.0, and the most bearish reporting a price target of just $1.0.
  
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $81.9 million, earnings will come to $9.7 million, and it would be trading on a PE ratio of 27.9x, assuming you use a discount rate of 8.0%.
  
• Given the current share price of $0.27, the analyst price target of $5.5 is 95.2% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.