CODX (CO-DIAGNOSTICS, INC.)
Score: 89.39 out of 100.00*

 

* My scoring formula, for details see below.

 

Key points:

  • Co-Diagnostics Inc scores highest in industry (Biotechnology), taking into account its valuation, profitability, growth and health.
  • 89.39 also represents one of the best scores out of 4969 companies screened
  • Based on infromation from news outlets, social media and analysts recommendations, CODX is overall viewed as a valuable stock
  • In my opinion, relatively strong fundamentals and position in the market make this small company a reasonable candidate for further research and a potential mid-term investment (min. 6 months)

Profile

Company’s website

Co-Diagnostics, Inc. engages in the development and innovation of molecular tools for detection of infectious diseases, liquid biopsy for cancer screening, and agricultural applications. Its diagnostics systems enable very rapid, low-cost, molecular testing for organisms and genetic diseases by automating historically complex procedures in both the development and administration of tests. The company was founded by Brent C. Satterfield and Dwight H. Egan on April 18, 2013 and is headquartered in Salt Lake City, UT.

Daily stock price and trading volume for DOCX (last 100 days).

Sector: Health Technology
Industry: Biotechnology. No. of companies in the same industry: 386

Price per share: $9.95
Target Price: $18-$23
Avg Volume : 1.32M
Volume: 704.003K
Mkt Cap: 287.454M
Employees: 37

 

Financial strength & scoring

Valuation

P/E (6.35) is better than in 94.59% stocks in industry
P/B (MRQ) (2.73) is better than in 69.21% stocks in industry
EV/EBITDA (5.09) is better than in 90.62% stocks in industry
Also worth attention:
Fwd P/E : 22.86
PEG : –
P/S : 3.02

Profitability

ROA (70.26) is better than in 99.71% stocks in industry
ROE (75.16) is better than in 99.08% stocks in industry
Net Margin (47.98) is better than in 96.34% stocks in industry
Also worth attention:
Gross M : 83.50%

Growth

EPS (TTM) (1.62) is better than in 94.89% stocks in industry
EPS Forecast (0.21) is better than in 95.0% stocks in industry
Also worth attention:
EPS this Y : 510.30%
EPS next Y : -43.64%
EPS past 5Y : 55.00%
EPS next 5Y : –

Health

Quick Ratio (18.23) is better than in 80.16% stocks in industry
Current Ratio (19.1) is better than in 82.17% stocks in industry
DEBT/EQUITY (0.0) is better than in 75.97% stocks in industry
Also worth attention:
LTDebt/Eq : 0.00

Other indicators

  • Piotroski F-Score: 6 out of 9
  • Altman Z-Score: 35.79 (safe area)
  • Div Yield 0.00
  • Payout Ratio 0.00%
  • 1-Y Beta 0.24
  • Volatility 4.71

 

How others valuate CODX

Yahoo Finance: Buy, target price: $23 (more than +100%)

MarketBeat: Buy, target price: $18 (more than +75%)

TheStreet: Hold

Weiss Ratings: Hold

Zacks: Hold

InvestorsObserver: 43/100

 

What others write about CODX

Aug-14-21 03:19AM Co-Diagnostics, Inc. (NASDAQ:CODX) Surges 42% Yet Its Low P/E Is No Reason For Excitement Simply Wall St.

[…] it’s not wise to just take the P/E at face value as there may be an explanation why it’s so limited.

Co-Diagnostics certainly has been doing a good job lately as it’s been growing earnings more than most other companies. One possibility is that the P/E is low because investors think this strong earnings performance might be less impressive moving forward.

Shares in Co-Diagnostics are going to need a lot more upward momentum to get the company’s P/E out of its slump. Using the price-to-earnings ratio alone to determine if you should sell your stock isn’t sensible, however it can be a practical guide to the company’s future prospects.

We’ve established that Co-Diagnostics maintains its low P/E on the weakness of its forecast for sliding earnings, as expected.

Aug-13-21 05:47PM Why Co-Diagnostics Zoomed Almost 10% Higher Today Motley Fool

Co-Diagnostics beat every collective analyst estimate for its most important metrics during the quarter. The company, which has risen to prominence even among non-healthcare investors because of its COVID-19 diagnostic products, said that its revenue was $27.4 million. That was nearly 14% higher on a year-over-year basis, and easily topped the average prognosticator forecast of almost $20.8 million.

Aug-13-21 04:21PM Co-Diagnostics Stock Surges As Variants Drive Covid Test Demand Investor’s Business Daily

The company credited strong sales of a Covid-19 test, dubbed Logix Smart. Overall, sales popped nearly 14% to $27.4 million. Analysts polled by FactSet called for just $20.8 million in sales.

Chief Executive Dwight Egan acknowledged the continued need for Covid tests as the virus continues to mutate.

Aug-13-21 02:03AM Are Robust Financials Driving The Recent Rally In Co-Diagnostics, Inc.’s (NASDAQ:CODX) Stock? Simply Wall St.

Firstly, we acknowledge that Co-Diagnostics has a significantly high ROE. Second, a comparison with the average ROE reported by the industry of 11% also doesn’t go unnoticed by us. Under the circumstances, Co-Diagnostics’ considerable five year net income growth of 71% was to be expected.

As a next step, we compared Co-Diagnostics’ net income growth with the industry, and pleasingly, we found that the growth seen by the company is higher than the average industry growth of 14%.

On the whole, we feel that Co-Diagnostics’ performance has been quite good. Particularly, we like that the company is reinvesting heavily into its business, and at a high rate of return. Unsurprisingly, this has led to an impressive earnings growth.

Aug-12-21 04:01PM Co-Diagnostics Reports Strong Second Quarter 2021 Financial Results PR Newswire

Second Quarter 2021 Business Highlights:

  • New international CoPrimer™ patent strengthened the Company’s intellectual property protection for the technology underpinning the millions of molecular diagnostic test products that have been deployed in laboratories and hospitals in over 50 countries and across the United States.
  • Over 20 million tests sold to-date as of Q3 2021
  • The Logix Smart™ SARS-CoV-2 DS (Direct Saliva) obtained regulatory authorization to be sold as an in vitro diagnostic for the diagnosis of COVID-19 in markets that accept CE markings.
  • CoSara Diagnostics was recognized for its work combating the COVID-19 surge in India and its tireless efforts to increase manufacturing of COVID-19 tests in response to the deadly wave of infections.

What Twitter says about CODX


More from Twitter

 

CODX on Reddit

More from Reddit

 

Sources

  • Yahoo Finance
  • FinViz
  • TradingView
  • MarketBeat
  • Weiss Ratings
  • Zacks
  • InvestorsObserver
  • TheStreet
  • Twitter
  • Reddit
  • Investopedia and Wikipedia (definitions)

 

Methodology

For each stock from NASDAQ and NYSE scores are calculated for each of the following areas:

  • Valuation
  • Profitability
  • Growth
  • Health

The scores are calculated using the indicators shown in colored boxes above. For instance, to assess stock’s profitability, Return on Assets (ROA), Return on Equity (ROE) and Net Margin are taken into account. The algorithm looks up the value of ROA in every stock belonging to the same industry and compares it against the analyzed stock, providing a final rank: if there are 20 stocks and 5 of them have higher ROA, then the ROA-associated score is (20-5)/20 * 100 = 75, meaning that the ROA is better than in 75% of stocks. We want ROA to be higher than in the other companies; sometimes, however, we want the indicator’s value to be lower than in peers, as is the case with Price to Book ratio (P/B).

In the next step, the mean score across ROA, ROE and Net Margin is calculated. Similar calculations are done for stock’s Valuation, Growth and Health. The algorithm starts with Valuation score, requiring it is at least 50/100. Then it proceeds with Profitability, Growth and Health scores, each time requiring the score to be 50 or higher. Finally, the mean value across all four areas of interest are calculated. Only highest ranking stocks subjected to further manual inspection.

 

Help

P/E (Price to Earnings ratio): the ratio of a company’s share (stock) price to the company’s earnings per share (EPS). A high Price-Earning ratio indicates that investors are expecting higher growth of company’s earnings in the future compared to companies with a lower Price-Earning ratio. A low Price-Earning ratio may indicate either that a company may currently be undervalued or that the company is doing exceptionally well relative to its past trends. The long-term average P/E for the S&P 500 is around 16x.

P/B (Price to Book ratio): compares a company’s current market value to its book value (where book value is the value of all assets owned by a company). Except in the case of a small minority of companies, like property companies and investment trusts that are asset-based, book values can bear little or no relationship to true values of the companies. In many of today’s companies, their most valuable assets are not shown on the balances sheet and are therefore not necessarily reflected in the company’s book value (e,g, copyrights, intellectual capital). Despite the limitations of the price-book ratio, academic research has repeatedly shown that stocks with low price-book ratios tend to outperform stocks with high price-book ratios in the United States and other stock exchanges.

EV/EBITDA: a popular valuation multiple used to determine the fair market value of a company. EV stands for Enterprise Value, while EBITDA represents earnings before interest, taxes, depreciation, and amortization. A key advantage of EV/EBITDA is that it is independent of the capital structure (i.e. the mixture of debt and equity). Therefore this multiple can be used to compare companies with different levels of debt. It also avoids the significant shortcoming of the P/E ratio which can be materially affected by the level of leverage in the company. As of Jan. 2020, the average EV/EBITDA for the S&P 500 was 14.20. As a general guideline, an EV/EBITDA value below 10 is commonly interpreted as healthy and above average by analysts and investors.

ROA (Return On Assets): shows how profitable a company’s assets are in generating revenue. It’s a useful number for comparing competing companies in the same industry. The higher the ROA number, the better, because the company is earning more money on less investment. ROAs over 5 are generally considered good.

ROE (Return ON Equity): measures the profitability of a business in relation to the equity. ROEs of at least 15–20 are generally considered good. Whereas ROE compares net income to the net assets of the company, ROA compares net income to the company’s assets alone, without deducting its liabilities. Sometimes an extremely high ROE is a good thing if net income is extremely large compared to equity because a company’s performance is so strong. However, an extremely high ROE is often due to a small equity account compared to net income, which indicates risk.

Net Margin (Net Profit Margin): Net profit margin or net margin is the percentage of net income generated from a company’s revenue. Net income is often called the bottom line for a company or the net profit. It helps investors assess if a company’s management is generating enough profit from its sales and whether operating costs and overhead costs are being contained. Net profit margin can be influenced by one-off items such as the sale of an asset, which would temporarily boost profits.

EPS (Earnings Per Share): calculated as net income (also known as profits or earnings) divided by available shares. The resulting number serves as an indicator of a company’s profitability. The higher a company’s EPS, the more profitable it is considered to be. What counts as a “good” EPS will depend on factors such as the recent performance of the company, the performance of its competitors, and the expectations of the analysts who follow the stock. Sometimes, a company might report growing EPS, but the stock might decline in price if analysts were expecting an even higher number.

Quick ratio: a ratio between quickly available or liquid assets and current liabilities. A company with a quick ratio of less than 1 cannot currently fully pay back its current liabilities. In general, the higher the ratio, the greater the company’s liquidity.

Current ratio: a liquidity ratio that measures whether a company has enough resources to meet its short-term obligations. It compares a firm’s current assets to its current liabilities. Acceptable current ratios vary from industry to industry. In many cases, a creditor would consider a high current ratio to be better than a low current ratio, because a high current ratio indicates that the company is more likely to pay the creditor back. Large current ratios are not always a good sign for investors. If the company’s current ratio is too high it may indicate that the company is not efficiently using its current assets or its short-term financing facilities.

D/E (Debt to Equity ratio): used to evaluate a company’s financial leverage and is calculated by dividing a company’s total liabilities by its shareholder equity. In other words, it measures the degree to which a company is financing its operations through debt versus wholy owned funds. Higher-leverage ratios tend to indicate a company or stock with higher risk to shareholders. What counts as a “good” debt-to-equity (D/E) ratio will depend on the nature of the business and its industry. Generally speaking, a D/E ratio below 1.0 would be seen as relatively safe, whereas ratios of 2.0 or higher would be considered risky.

LTDebt/Eq (Long Term Debt to Equity ratio): calculated by taking the company’s long-term debt and dividing it by the book value of common equity. Similar to D/E, but long term debt is applied there (debt that matures in more than one year).

PEG (price/earnings to growth ratio): a valuation metric for determining the relative trade-off between the price of a stock, the earnings generated per share (EPS), and the company’s expected growth. PEG is a widely employed indicator of a stock’s possible true value. Similar to PE ratios, a lower PEG means that the stock is undervalued more. It is favored by many over the price/earnings ratio because it also accounts for growth. Criticisms of the PEG ratio include that it is an oversimplified ratio that fails to usefully relate the price/earnings ratio to growth because it fails to factor in return on equity (ROE) or similar factors. On the other hand, the PEG ratio can offer a suggestion of whether a company’s high P/E ratio reflects an excessively high stock price or is a reflection of promising growth prospects for the company.

P/S (Price to Sales ratio): a valuation ratio that shows a company’s market capitalization divided by the company’s sales for the previous 12 months. It is a measure of the value investors are receiving from a company’s stock by indicating how much are they are paying for the stock per dollar of the company’s sales. Analysts prefer to see a lower number for the ratio. A ratio of less than 1 indicates that investors are paying less than $1 per $1 of the company’s sales. Any number higher than 4 is commonly considered unfavorable.

Gross margin: a difference between revenue and cost of goods sold (COGS), divided by revenue. In other words, it is the sales revenue a company retains after incurring the direct costs associated with producing the goods it sells, and the services it provides. The higher the gross margin, the more capital a company retains on each dollar of sales, which it can then use to pay other costs or satisfy debt obligations.

Piotroski F-Score: a discrete score between zero and nine that reflects nine criteria used to determine the strength of a firm’s financial position. The Piotroski Score is used to determine the best value stocks, with nine being the best and zero being the worst.

Altman Z-Score: the output of a credit-strength test that gauges a publicly-traded manufacturing company’s likelihood of bankruptcy. It uses profitability, leverage, liquidity, solvency, and activity to predict whether a company has a high probability of becoming insolvent. A score below 1.8 means it’s likely the company is headed for bankruptcy, while companies with scores above 3 are not likely to go bankrupt. Investors can use Altman Z-scores to determine whether they should buy or sell a stock if they’re concerned about the company’s underlying financial strength. Investors may consider purchasing a stock if its Altman Z-Score value is closer to 3 and selling or shorting a stock if the value is closer to 1.8.

Div Yield (Dividend Yield): a ratio (dividend/price) that shows how much a company pays out in dividends each year relative to its stock price.

Payout ratio: a financial metric showing the proportion of earnings a company pays its shareholders in the form of dividends, expressed as a percentage of the company’s total earnings.

Beta: a measure of a stock’s volatility in relation to the overall market. By definition, the market, such as the S&P 500 Index, has a beta of 1.0, and individual stocks are ranked according to how much they deviate from the market. A stock that swings more than the market over time has a beta above 1.0. If a stock moves less than the market, the stock’s beta is less than 1.0. High-beta stocks are supposed to be riskier but provide higher return potential; low-beta stocks pose less risk but also lower returns.

Volatility: represents how large an asset’s prices swing around the mean price.

MRQ: Most Recent Quarter.

TTM: Trailing Twelve Months.

Volume: the total number of shares that are actually traded (bought and sold) during a period of time.

 

Disclaimers

  • What you see here is my personal opinion and should not be treated as an investing advice
  • I’m not an expert stock analyst nor financial advisor
  • I’m not associated with any of the sources cited

 

Michał, the Investing Scientist.

 

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