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Barry Cohen
Barry Cohen
Articles (223) 

Analysts Set Quidel Median Target Price Above $360

Diagnostic company will continue to benefit from growth in Covid-19 testing

October 06, 2020 | About:

Teams from the Pac-10 and Big 10 conferences are returning to action safely, thanks in great part to Quidel Corp. (NASDAQ:QDEL). Student athletes and staff personnel from member schools will be checked before every practice and every game for Covid-19 using the San Diego-based company's diagnostic test.

That news is welcome to not only the teams, but to investors as well. Year to date, Quidel shares have soared nearly 230% to $250. It appears the stock still has plenty of upside. Analysts rate Quidel a strong buy with a median target price of $361. Their bullishness is unquestionably tied to vastly improved sales and earnings. The company said it expects third- and fourth-quarter revenue to be significantly higher than Wall Street analysts' forecasts on the strength of its 15-minute diagnostic test for Covid-19, according the San Diego Union-Tribune.

Third-quarter results will be released at the end of the month. Quidel expects revenue in the range of $475 million to $477 million. Wall Street analysts on average had predicted sales of about $400 million. The picture looks even brighter moving forward. FierceBiotech reported that Quidel President and CEO Douglas Bryant said revenue will be in the $800 million range for the last three months of 2020. The better-than-expected performance should not come as a surprise, Raymond James analyst Andrew Cooper wrote in a research note.


"Our stance has been that the company could sell all it could manufacture in the near-term, and this remains the case, even if it is manufacturing more than the Street conservatively modeled," Cooper wrote.

Earlier this year, Quidel became the first company to get the Food and Drug Administration's approval for a rapid antigen test, which detects pieces of the coronavirus from nose or throat swabs. Demand continues to surge as schools and businesses seek quick results from daily tests to ensure they can operate safely.

The company recently got the green light from the agency for what it calls a rapid "ABC" test—a 15-minute, point-of-care diagnostic for influenza A, influenza B and Covid-19. The test is similar to the one approved in May, but this version can tell the difference among the respiratory diseases with a single swab.

Among the other antigen tests on the market is one from Abbott Laboratories (NYSE:ABT). Quidel welcomes the competition because it helps raise overall awareness of the benefits of testing. "In this pandemic, the medical diagnostics industry is competing against Covid-19, not among companies," Quidel emphasized. "The need for testing appears virtually unlimited at this time."

Disclosure: The author holds no position in any of the companies mentioned in this article.

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About the author:

Barry Cohen
Barry Cohen has nearly 40 years experience in communications and marketing, the majority in senior positions at large international health care companies, including Abbott Laboratories and Bayer Inc.

He has contributed to a number of financial websites, writing primarily about the stocks of health care companies.

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