The Stock of the Coronavirus-Test Developer Has Skyrocketed. It Can Keep Rising, Analyst Says

A small diagnostics firm that developed a test for Covid-19, the novel coronavirus spreading through China, has seen its share price nearly triple since the start of the year. In a note out Tuesday, Maxim Group analyst Jason McCarthy wrote that the stock could keep climbing.

Co-Diagnostics (ticker: CODX) took just three weeks to develop a test for Covid-19. The company is now selling the test for research use.

McCarthy, who rates Co-Diagnostics a Buy, raised his price target to $5, from $2. The stock closed at $3.32 on Friday.

“We view this as de-risking of the platform, as a real-world example of how quickly CDI can develop a test in response to a novel viral outbreak,” McCarthy wrote. “We also see the increased media attention as a positive, which could help drive adoption, lowering commercial risk.”

Shares of Co-Diagnostics were down 2.1% to $3.25 shortly after the market opened on Tuesday. The S&P 500 was down 0.3%.

Co-Diagnostics stock is up 271% in 2020, while the broader S&P 500 has climbed 4.6%. Co-Diagnostics is up 186% over the past 12 months.

McCarthy wrote that the surge of interest in Co-Diagnostics has allowed the company to raise $15 million in the public markets over the past few weeks, which has given the company enough cash to operate into next year.

“The company has demonstrated the ability to rapidly develop tests for emerging diseases like Zika and Ebola, and now the coronavirus, thereby highlighting the versatility of its platform, as well as demonstrating that the company will be able to develop tests for future emerging outbreaks,” McCarthy wrote.

Co-Diagnostic’s test is fast, able to detect the disease even in asymptomatic patients in 45 minutes. The test can run 48 samples at a time. McCarthy wrote that the Covid-19 test may not generate substantial revenue for the company but that it demonstrates Co-Diagnostics’s capabilities.

On Feb. 10, the company announced the first sales of the test. It is available only for research use. “The rapid development and time to commercialization was possible thanks to the innovation of our proprietary and patented platform, our dedicated employees, and the support of our suppliers,” company CEO Dwight Egan said at the time.

Write to Josh Nathan-Kazis at