The revenue and profitability boom that ensued is still reverberating in today's financials, although at a much lower volume than during 20. By January 14th, 2020, CODX had developed a COVID PCR test and was the first company to obtain approval for manufacturing in the U.S., as early as February 2020. The pandemic boom: The company quickly realized the opportunity opened by the pandemic. In the chart below, selling expenses is the difference between SG&A and G&A, or about $1 million for FY19. Business descriptionĭiagnostics development: Before the pandemic, CODX was trying to commercialize its patented methodology for PCR and other forms of molecular testing.īeing unprofitable is something normal for these companies, but what caught my attention is that CODX spent more on general and administrative expenses than on selling and R&D combined. When considered operationally, CODX is no longer an opportunity. For a minority shareholder, the company has to be considered from the operational perspective because management has not commented that it plans to return cash to shareholders in the form of a dividend. However, I argue that the cash reserves can only be considered from the perspective of a controlling shareholder, and even then, the company is not a good opportunity at current prices. Today, the company is back to unprofitability, but with a big difference it now sits on $85 million in cash, which, compared to a market cap of $90 million, implies an EV close to $0.ĬODX stock could seem attractive based on its cash reserves alone.
When COVID arrived, the company was quick to obtain permits to market its PCR tests and made a killing. It had negligible revenues and was very unprofitable. The company was in the early stages of commercializing its products before the pandemic. Co-Diagnostics ( NASDAQ: CODX) is a developer of PCR and molecular diagnostics treatments.
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