Its good day for Co-Diagnostics Inc [NASDAQ:CODX] investors. After several months in the red, the stock has rocketed today and is currently up by 31%. The rally follows the company’s announcement that it had made an agreement with Arches Research Inc for the expansion of Arche’s COVID-19 testing services. This will be implemented using Co-Diagnostics’ test kit called Logix Smart.
The deal is a continuation of a relationship that started earlier in the year when Arches Research began using the Co-Diagnostics kits for testing. The signing of the deal comes just days after a 3rd party study on the kits concluded that their performance was good and that they could be used in smoothening out the process of reopening workplaces, schools, and other amenities.
Commenting on the agreement, Co-Diagnostics CEO Dwight Egan stated that they were happy with the expanded relationship with one of the company’s most valued lab clients. He added that they were optimistic that the expanded relationship would open new opportunities to sell not just test kits, but other diagnostic products that the company was working on. Some of the products that it has under development include the upcoming Logix Smart Flu A/ Flu B and COVID-19 kits.
With this deal in place, this stock’s current bullish reversal could mark the start of a new uptrend. That’s because, with the expanded deal, the company’s revenues will grow in coming quarters. This will mean a higher intrinsic value for the company and by extension its price. On top of that, investors anticipating stronger earnings in the near-term are likely to keep bidding up the stock price in the near-term. This is already happening as can be seen in the sustained increase in price since the company announced the expanded deal.
There is also the fact that with the 3rd party validation of the company’s test kits, other companies and even governments are likely to start making their orders for its COVID-19 test kits. That’s because, while the world is awaiting a vaccine, testing remains the most effective way to fully get the economy working optimally again in the near-term. It is through testing that establishments that deal with lots of people can reopen safely, by isolating those who have COVID-19 from the rest of society. Testing also presents an opportunity for governments to understand the patterns of the disease and model it for policy decision-making on COVID-19.
About Co-Diagnostics Inc
Co-Diagnostics Inc is a molecular diagnostics corporation. It is based in Salt Lake, Utah.