The poor control of COVID-19 in the United States has created an unprecedented testing opportunity for GenMark (GNMK), and so far the company is doing a good job of leveraging that opportunity to get hardware in the field and establish relationships with healthcare facilities that may well last well beyond this outbreak. Although the intense demand for tests is pushing the company to expand capacity as quickly as possible, it has also allowed the company to clean up its balance sheet on relatively attractive terms.
I thought GenMark still had near-term upside last quarter, and the shares have shot up almost another 70% as COVID-19 testing demand remains intense. There are still very valid concerns about what the post-COVID-19 operating environment will look like, but the company is definitely better-placed now than before and the valuation is not unreasonable on some shorter-term valuation approaches.
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