About a year ago, Abbott Laboratories (ABT 0.04%) made a decision that would prove transformative. The company entered the coronavirus testing market -- and in a big way. The U.S. Food and Drug Administration (FDA) granted Abbott a first Emergency Use Authorization (EUA) in March 2020. But Abbott didn't stop there. Abbott created various types of COVID-19 diagnostics -- and the EUAs multiplied. Today, Abbott has at least nine.

At the same time, though, Abbott's other diagnostics and medical devices suffered. That's because hospitals postponed procedures to focus on coronavirus patients. Still, Abbott managed to deliver strong 2020 earnings -- and predict a bright future. Let's take a closer look at how all of these elements will work to make shareholders richer this month and beyond.

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Image source: Getty Images.

A game-changing test

First, let's talk about coronavirus testing. Abbott launched a game-changing product back in August: the BinaxNOW. This is a 15-minute, $5 portable test for professional use. The U.S. bought 150 million of these tests to be used in schools, nursing homes, and underserved communities. There could be more such orders in the future; President Joe Biden has made increased coronavirus testing one of his main goals. The federal government said it would invest more than $12 billion in the effort.

And late last month, the market for BinaxNOW broadened. The FDA granted Abbott an EUA for an over-the-counter BinaxNOW self-test. This means asymptomatic individuals can buy the test at their local pharmacy without a prescription and test themselves at home. Adults can also use the test on kids as young as age two. And no worries -- the nasal swab is minimally invasive.

Abbott has made sure it can deliver as demand increases. The company has ramped up to produce 50 million BinaxNOW tests each month.

So how does all of this translate into revenue? We've got some clues from the most recent earnings report. In the fourth quarter, which ended Dec. 31, Abbott's coronavirus tests generated a total of $2.4 billion in revenue. The BinaxNOW and two of Abbott's other rapid coronavirus tests contributed $1.9 billion. That was BinaxNOW's first quarter on the market. Due to the government's initiatives to test more and the BinaxNOW's new self-testing indication, I expect revenue to climb higher in the coming quarters.

The problem areas

Now, let's look at last year's problem areas: certain non-coronavirus diagnostics and medical-device sales. Of course, the pandemic isn't over. But in the U.S., the crisis is easing as states vaccinate more and more people. Cases have generally been on the decline since a January peak. So, we can expect hospitals and healthcare settings to start catching up on previously postponed procedures and tests. And this will benefit Abbott's diagnostics and medical-device businesses.

But I'm not the only one who is optimistic. Abbott's management is, too: The company predicts 2021 earnings per share will climb more than 35% year over year to $5.

Abbott's shares aren't expensive considering growth potential. The stock is trading at 24 times forward earnings estimates. It's traded higher than that for most of the past year:

ABT PE Ratio (Forward) Chart

ABT PE Ratio (Forward) data by YCharts.

This is a great buying opportunity for a stock that has delivered over time. Abbott shares have climbed more than 100% over the past three years. And annual profit and revenue have increased over that time period, too:

ABT Chart

ABT data by YCharts.

Abbott reports first-quarter earnings on April 20. Optimism that we'll see growth in coronavirus testing and recovery in areas that suffered last year are already driving the stock higher; Abbott shares are up more than 9% year to date.

Here's the thing: Abbott may offer you positive returns in just a month or two. But this healthcare stock will make you even richer if you hold on for the long term.