Best Coronavirus Testing Stocks: Abbott, Quest Or Chembio Diagnostics?

by Trefis Team
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Testing is viewed as key to containing the spread of the Coronavirus pandemic and re-opening the economy until a safe vaccine is developed. For instance, the U.S. government on Monday indicated that it would scale up its testing strategy significantly, providing enough tests for all 50 states to screen at least 2% of their populations. Demand for coronavirus test kits has also significantly outstripped supply thus far, and the stocks of companies providing testing equipment and services have generally outperformed the broader index. While the stock price of Abbott labs has gained 9% year-to-date as of 24th April, with Quest Diagnostics up by 1%, smaller-cap stocks in the diagnostics space such as Co-Diagnostics and Chembio are up 15x and 2.5x respectively. The S&P 500, on the other hand, is down 12% year-to-date. For more details on the stock price and fundamental performance of some of the key U.S. listed companies with exposure to coronavirus testing, view our indicated list of  Coronavirus testing stocks. Below, we take a look at the key products offered by companies in this space and how testing stocks could stack up versus potential therapeutics and vaccine stocks.

Stocks To Watch In The Testing Space

Abbott Labs (9% YTD Return, $165 billion market cap): Medical devices major Abbott has a diverse range of testing solutions for coronavirus in the market, ranging from swab-based molecular tests that can be carried out on a portable testing device that provides results in as little as 5 minutes, to antibody-based tests, which require a blood draw and help to detect whether a person has or has had the virus in the past. Abbott is also working on developing a lateral flow serology test, which could be deployed at a much larger scale. Lateral flow serology is used in at-home pregnancy tests. View our analysis Abbott Labs Revenues: for a breakdown of the company’s segments including Medical Devices, Diagnostics.

Quest Diagnostics (1% YTD Return, $14 billion market cap): While Quest – one of the largest U.S. diagnostics chains – has been impacted by the pandemic and associated shutdowns, as diagnostic testing for other conditions has been interrupted, the company is likely to benefit from stronger demand for COVID tests. Quest has been scaling up capacity and indicated that it would be able to perform ~150k coronavirus antibody tests per day by early-May, using tests from Abbott and Euroimmun.

Chembio Diagnostics (240% YTD Return, $0.3 billion market cap): The small-cap company has seen its stock rally by over 240% year-to-date, as it made steady progress with coronavirus related diagnostics. Earlier this month, the U.S. FDA authorized emergency use of the company’s point-of-care System, which rapidly detects certain Coronavirus antibodies from a fingerstick sample.

Coronavirus Testing Stocks Vs. Diagnostics and Therapeutics

The U.S. listed companies working on Coronavirus vaccines, have fared relatively better that companies working on therapeutics and testing, gaining 130% year-to-date. View our dashboard analysis COVID Vaccine Stocks and COVID Treatment Stocks for a list of companies working on Coronavirus vaccines and treatments. That said, testing stocks could be a safer bet to gaining exposure to the opening up of the economy, as most diagnostic companies already have products that are generating revenue compared to treatments and vaccines which are still in the pre-clinical or testing stage.

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