BioTuesdays

Maxim cuts Co-Diagnostics to hold; removes PT

Co-Diagnostics

Maxim Group downgraded Co-Diagnostics (NASDAQ:CODX) to “hold” from “buy” and removed its priced target, citing COVID-19 testing and revenue growth, which appear “to have peaked.” The stock closed at $9.70 on March 26.

“While other initiatives are intact, at the current market cap of $278-million, what success remains from a COVID perspective is likely priced in the stock,” writes analyst Jason McCarthy, Ph.D..

“The risk in the story was (and still is), what happens to COVID testing in 2021? Headwinds have been building in two key areas; test volumes, which have been declining, and the availability of rapid tests,” Dr. McCarthy said, pointing to Abbott Labs, which performed $1.9-billion in rapid tests alone in fourth quarter of 2020.

“There may be a role for PCR tests, but likely at a reduced share of the market, regardless of the superior accuracy,“ he added.

Dr. McCarthy said the “outlook from our perspective as we head through 2021 is COVID testing will continue to decline. However, the risk to this view is another major surge in the near-term that drives testing back up significantly – though we think this is not likely for now.”

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