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. With the latest financial year loss of -US$6.3m and a trailing-twelve month of -US$6.4m, the US$20m market-cap amplifies its loss by moving further away from its breakeven target. The most pressing concern for investors is CODX’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for CODX.
Consensus from the 2 Medical Equipment analysts is CODX is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$1.8m in 2022. So, CODX is predicted to breakeven approximately 2 years from today. How fast will CODX have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 58% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, CODX may become profitable much later than analysts predict.
Given this is a high-level overview, I won’t go into details of CODX’s upcoming projects, though, keep in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing I’d like to point out is that CODX has no debt on its balance sheet, which is quite unusual for a cash-burning 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.
This article is not intended to be a comprehensive analysis on CODX, so if you are interested in understanding the company at a deeper level, take a look at CODX’s company page on Simply Wall St. I’ve also compiled a list of essential factors you should look at:
- Historical Track Record: What has CODX's performance 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.
- 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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