What happened

Shares of Co-Diagnostics (CODX 2.65%) were soaring 15.5% higher as of 11:22 a.m. EDT on Thursday. The big jump came after the company announced that its COVID-19 test technology has been validated for use on saliva samples.

So what

Anyone who saw President Trump's press conference around a month ago after he was tested for COVID-19 heard the president say "there was nothing pleasant" about the test. Initial COVID-19 testing was done using nasal swabs. And they're not pleasant.

COVID-19 printed in white and red against a blue background.

Image source: Getty Images.

But COVID-19 tests that use saliva samples are much more pleasant. For those tests, individuals need only "swish and gargle," Co-Diagnostics CEO Dwight Egan said.

OraolDNA Labs' validation of Co-Diagnostics' COVID-19 test with saline oral rinse samples is good news for the company. OralDNA Labs also informed the U.S. Food and Drug Administration (FDA) that it plans to use Co-Diagnostics' validated test in its lab.

Co-Diagnostics' Logix Smart COVID-19 test is currently available for use in all labs certified under Clinical Laboratory Improvement Amendments (CLIA) under the FDA's Emergency Use Authorization program.

Now what

The COVID-19 outbreak has been a major catalyst for Co-Diagnostics, with its shares skyrocketing more than 1,100% so far this year. However, the company isn't profitable yet. The stock is now trading at an astronomically high price-to-sales multiple. Co-Diagnostics' revenue is likely to grow tremendously, but it remains to be seen if that growth will be enough to justify the stock's steep valuation.