Co-Diagnostics, Inc.’s (NASDAQ:CODX): Co-Diagnostics, Inc., a molecular diagnostics company, intends to manufacture and sell reagents used for diagnostic tests that function via the detection and/or analysis of nucleic acid molecules. The company’s loss has recently broadened since it announced a -US$6.3m loss in the full financial year, compared to the latest trailing-twelve-month loss of -US$6.3m, moving it further away from breakeven. Many investors are wondering the rate at which CODX will turn a profit, with the big question being “when will the company breakeven?” I’ve put together a brief outline of industry analyst expectations for CODX, its year of breakeven and its implied growth rate.
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CODX is bordering on breakeven, according to the 2 Medical Equipment analysts. They anticipate the company to incur a final loss in 2019, before generating positive profits of US$878k in 2020. Therefore, CODX is expected to breakeven roughly a couple of months from now! In order to meet this breakeven date, I calculated the rate at which CODX must grow year-on-year. It turns out an average annual growth rate of 72% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, CODX may become profitable much later than analysts predict.
Underlying developments driving CODX’s growth isn’t the focus of this broad overview, however, take into account that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before I wrap up, there’s one aspect worth mentioning. CODX currently has no debt on its balance sheet, which is rare for a loss-making loss-making, growth company, which typically has high debt relative to its equity. This means that CODX has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of CODX which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at CODX, take a look at CODX’s company page on Simply Wall St. I’ve also put together a list of key aspects you should further research:
- Valuation: What is CODX worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether CODX is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Co-Diagnostics’s board and the CEO’s back ground.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
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