Chembio (CEMI) is rising. A COVID stock to buy?

Stocks of Chembio Diagnostics Inc. (NASDAQ:CEMI) climbed about 14 per cent at market open on Friday, August 27, as the company announced that it will start the commercial distribution of its SCoV-2 Ag Detect ™ Rapid Test.

The rapid COVID-19 biochemical test has been approved by the Food and Drug Administration (FDA) for emergency use in decentralized and traditional testing settings.

According to the company, the rapid test kits are in stock and immediately available for shipments across the US.

Some investors seem to be increasing their focus on CEMI stock as it has surged by about 25 per cent since the past one week.

What's next for Chembio Diagnostics (NASDAQ:CEMI)?

Despite growing vaccination rates worldwide, new variants of the coronavirus still pose a major threat to the world. The SCoV-2 Ag Detect™ Rapid Test provides results in just 20 minutes from a nasal swab and Chembio could find a large customer base in the US.

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Charles Caso, who is Vice President of Sales and Marketing for Chembio, has said that the company had added different products for COVID-19 and the rapid test can be used in symptomatic and asymptomatic populations.

Chembio's Status™ COVID-19/Flu A&B, is a product that can help a user differentiate flu from COVID-19. Often people panic when they have symptoms like cold and cough, however, it is not always necessary that it could be COVID-19, sometimes it is just flu.

Chembio’s (CEMI) stock and financial performance

CEMI stock was priced at US$ 3 per share at the time of writing this, 47 per cent higher in comparison to the 52-week low of US$ 2.06 apiece on July 20, 2021.

The healthcare company’s stock has surged by eight per cent month-to-date (MTD) and three per cent quarter-to-date (QTD) as the CEMI stock has recently started gaining momentum.

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In Q2 2021, Chembio recorded total revenue of US$ 6.5 million, an increase of 26 per cent year-over-year (YoY). Meanwhile, the product revenue was US$ 3.9 million, up by four per cent in the same comparable period last year.

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Notably, the company also received an order of US$ 4 million from Ethiopia and the company will be supplying HIV Test kits there.

Bottom Line

Since the outbreak of the coronavirus pandemic, the rapid testing market has grown massively. With new variants of this virus coming up, which are said to be highly contagious, the industry’s need and demand are likely to rise further.