Zomedica Corp (NYSE: ZOM) has had a rough time in the market over the past few trading sessions, following dramatic gains of more than 800% seen throughout the beginning of 2021. Now, with the stock ticking down, many are wondering what’s going on and if now is the time to get out.
In my view, this is profit taking that’s generally expected at the top of a very dramatic run. However, with major catalysts just around the corner and the retail investing community banding behind the stock, ZOM may still be an opportunity.
Skip to What You Want to Read
- What Is Zomedica?
- Why Zomedica Saw Dramatic Gains Early in 2021
- What’s Ahead for Zomedica?
- What Analysts Think About ZOM Stock
- Risks to Consider Before Buying ZOM Stock
- Final Thoughts
What Is Zomedica?
Zomedica is an animal health company that develops technology to improve the care of companion animals. The company’s claim to fame is its TRUFORMA diagnostics platform.
TRUFORMA is a point-of-care platform that allows for rapid results in some of the most pressing conditions in the animal health space. Previously, for many of the tests on the TRUFORMA platform, veterinarians would have to take samples of either blood or tissue, and ship those samples to the lab.
From there, a waiting period that could last from days to more than a week commenced.
With the TRUFORMA veterinary diagnostics platform, there is no extended waiting period. The platform is housed in the vet’s office and tests are done in real time. As a result, not only will peace of mind come to the consumers that own the pets faster, but time-sensitive ailments will be picked up faster, leading to a better chance of curing the ailments.
Why ZOM Stock Saw Dramatic Gains Early in 2021
2021 has proven to be a compelling year for ZOM stock, with gains in multiples throughout the year so far, that is, until the past few trading sessions.
So, what caused the run? There are a few things:
- TRUFORMA Launch Announcement. ZOM announced that it would be launching TRUFORMA on March 30 of this year. That’s exciting news. Given the competitive advantages offered by the platform, demand is expected to be high and investors are excited about the potential revenue.
- Commercialization Plan. Zomedica entered into a distribution agreement with Miller Veterinary Supply, one of the largest veterinary distribution companies in the world. So, this distribution agreement allows the company to tap into one of the largest veterinary networks in the world, greatly expanding its addressable market and potential revenue through TRUFORMA.
- No More Delisting Threat. Recently, ZOM was in danger of being delisted, which would be a painful reality for the stock. Not only would the stock be traded on the OTC, institutional investors and index funds would likely sell off, leading to dramatic declines. However, with the recent movement we’ve seen in the stock, delisting is no longer a concern.
- Retail Investors. We’ve seen what can happen when retail investors band together over the past several weeks. Well, retail investors seem to be banding together behind Zomedica, with the company being one of the hottest topics of conversation on investor message boards and social media.
All of these factors combined led to tremendous demand for ZOM stock. As a result, the stock saw a compelling increase in both volume and valuation.
What’s Ahead for Zomedica?
This is the million-dollar question. The fact of the matter is that nobody can tell you what’s going to happen in the future, but what I see here is a speculative play that could continue to see dramatic gains. Here’s why:
- I Spend a TON of Money at the Vet. I have eight dogs. I know, call me crazy, but I love my dogs. I spend a ton of money at the vet, and I know what it feels like when you have to wait a week to find out just how sick your pet is. The time advantage offered by TRUFORMA is valuable, and will likely result in incredible demand.
- Profit Taking Happens. When was the last time you saw such tremendous gains in price without a bit of profit taking. It’s common in the market, and once profit taking is over, more buying usually picks back up.
- Distribution Model. I believe the distribution model ZOM is following is impressive. Miller Veterinary Supply is a great partner to have on the company’s side, and will likely hit the ground running on March 30th.
Sure, there are risks, which we’ll talk about later, but the potential reward here if TRUFORMA becomes the blockbuster product that many expect it to be is hard to ignore.
What Analysts Think About ZOM Stock
Zomedica doesn’t have a whole lot of analyst coverage. In fact, according to TipRanks, only one analyst is covering the stock. However, that analyst rates the stock a Buy.
Risks to Consider Before Buying ZOM Stock
If you’re going to buy ZOM stock, you’re going to have to be willing to accept risk. Risk is just part of investing. Nonetheless, here are the most significant risks to consider:
- Speculation. Zomedica is a very speculative play. First and foremost, the company’s TRUFORMA product is expected to be a smash hit, but nobody knows just how the product will sell because it’s never been on the market before. If sales flop, the stock could experience significant declines.
- Volatility. ZOM stock is known to experience high levels of volatility. Stocks with high levels of volatility are hard to time. Moreover, significant losses can happen over a very short period of time.
- Profitability. Zomedica isn’t a profitable company and is dependent on the money it has on its balance sheet to survive. If those funds don’t last through profitability, dilutive offerings may be on the horizon.
- Delays. The goal is to have TRUFORMA ready to launch by March 30. However, delays happen from time to time. Any delay in the launch of the diagnostics platform could result in significant declines.
While there are risks to consider before buying Zomedica stock, it’s a strong play for the investor with a hefty appetite for risk and a goal of producing compelling gains.
The fact of the matter is that if everything goes right with TRUFORMA, ZOM will be sitting on a blockbuster product, revenue will come in droves, and profitability is just around the corner. All of this bodes well for further tremendous gains in the value of the stock.