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Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Co-Diagnostics, Inc. (NASDAQ:CODX) due to its excellent fundamentals in more than one area. CODX is a company with impressive financial health as well as a buoyant growth outlook. Below is a brief commentary on these key aspects. If you’re interested in understanding beyond my broad commentary, read the full report on Co-Diagnostics here.
Flawless balance sheet with high growth potential
CODX is an attractive stock for growth-seeking investors, with an expected earnings growth of 72% in the upcoming year. Earnings growth is paired with an eye-catching top-line trajectory also doubling over the same period, which indicates a high-quality bottom-line expansion, as opposed to those driven by unsustainable cost-cutting activities. CODX’s strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This suggests prudent control over cash and cost by management, which is an important determinant of the company’s health. Looking at CODX’s capital structure, the company has no debt on its balance sheet. This implies that the company is running its operations purely on off equity funding. which is typically normal for a small-cap company. Therefore the company has plenty of headroom to grow, and the ability to raise debt should it need to in the future.
For Co-Diagnostics, I’ve compiled three key factors you should further research:
- Historical Performance: What has CODX’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Valuation: What is CODX worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether CODX is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of CODX? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.