Please ensure Javascript is enabled for purposes of website accessibility

Here's Why Quidel Stock Is Soaring Today

By Cory Renauer – May 11, 2020 at 3:24PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The diagnostics company's rapid point-of-care test for COVID-19 received an emergency use authorization from the FDA.

What happened

Shares of Quidel (QDEL), a diagnostics company that specializes in rapid testing for a variety of diseases, were on the rise following good news from the FDA. The company's point-of-care SARS-CoV-2 test received an emergency use authorization (EUA) on Saturday, and as a result, the stock was up 31.1% as of 3:18 p.m. EDT Monday.

So what 

The Food and Drug Administration has handed out a lot of EUAs for new coronavirus tests recently,  but Quidel's stands out as the only antigen-based test. The Sofia 2 SARS-CoV-2 Antigen FIA looks for specific pieces of  the novel coronavirus instead of the antibodies our immune systems generate in response to those antigens.

Rising chart with dollar signs.

Image source: Getty Images.

While a positive antibody test tells healthcare providers that someone has had a COVID-19 infection, that doesn't necessarily mean they're still infected. Diagnostic tests that look for genetic material specific to viruses are generally less likely to deliver false positives than antibody tests, but those molecular diagnostics tend to cost more and take much longer to run. Quidel's antigen test could become a huge revenue stream for the company because it offers healthcare systems an inexpensive solution that's accurate and fast.

Now what

Quidel's bottom line had been relatively stagnant, but things are looking up thanks to the increasing popularity of its Sofia 2 point-of-care testing system. During the first quarter, its adjusted earnings rose 36% year over year to $53 million.

An unusually heavy influenza season followed by explosive demand for coronavirus testing will probably make 2020 a banner growth year for the diagnostics company. 

Cory Renauer has no position in any of the stocks mentioned. The Motley Fool recommends Quidel. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Quidel Stock Quote

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/06/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.