Zomedica Corp. (NYSEAMERICAN: ZOM) is screaming for the top yet again this morning, following up on the tremendous gains we’ve seen out of the stock as of late. However, the company hasn’t issued any news. There have been no press releases or SEC filings. So, what’s the deal?
Retail investors seem to be battering hedge funds yet again. Here’s what’s happening:
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- Retail Investors Send Zomedica Stock for the Top
- What Is Zomedica
- What Analysts Think About ZOM Stock
- Risks to Consider Before Buying ZOM Stock
- Final Thoughts
Retail Investors Send Zomedica Stock for the Top
As mentioned above, Zomedica is making its way for the top in the market this morning, but with no news released, many are scratching their heads, wondering why.
So, what’s the deal?
Across social media, including Reddit, Twitter, and StockTwits, we’re seeing quite a bit of due diligence being done by retail investors. In particular, investors are looking forward to the launch of TRUFORMA, Zomedica’s veterinary diagnostics platform.
On March 30, 2021, the company intends on running with its commercial launch of the platform, which many believe will be a big hit, driving tremendous revenues for the company.
At the same time, ZOM stock is a perfect target for members of the Wall Street Bets Reddit. These members are retail investors that decided they would fight back against hedge funds by forcing short squeezes.
With that said, ZOM trades with some pretty heavy short interest. In fact, at the most recent check, the short volume on the stock was 36%. That’s a very high short interest.
As a result, as the stock ticks up, those who short the stock lose money, leading them to race for cover, which means they buy shares at current prices to close their positions. This activity ultimately results in tremendous growth in volume and serious price appreciation, which seems to be the case this morning.
What Is Zomedica
Zomedica is a biotechnology company, specifically focused on the veterinary industry. In particular, the company developed the TRUFORMA diagnostics platform, which is designed to pick up on a wide range of ailments that pose threats to our furry friends.
There are two major benefits to the TRUFORMA platform:
- Detection. TRUFORMA detects illnesses that are not able to be detected by any other veterinary platform on the market today. As a result, it is likely to be in high demand as pet owners look for more solid answers when they go to the vet.
- Speed. Many of the illnesses that other tests can detect require samples to be sent to a laboratory. This means that vets and their patients must wait days, or even weeks, for answers as to what’s going on with their pets. The TRUFORMA platform is a point-of-care diagnostics system, providing results in minutes, rather than days or weeks.
What Analysts Think About ZOM Stock
Zomedica stock doesn’t have a whole lot of analyst coverage. In fact, there’s only one analyst currently covering the stock. Nonetheless, that analysts holds a positive opinion of ZOM.
In fact, the analyst rates the stock a Buy with a price target of $1.20 per share. Keep in mind that the coverage is somewhat outdated and doesn’t take recent news into account.
Risks to Consider Before Buying ZOM Stock
If you’re thinking about buying ZOM stock, or any other stock for that matter, you’re going to have to be willing to accept risk. It’s all part of investing. When it comes to Zomedica, the most significant risks to consider include:
- Capital Risk. Zomedica doesn’t generate revenue at the moment, that will start in late-March when the company launches TRUFORMA. Nonetheless, if the company can’t reach profitability quickly enough, it may look to raise funds through offerings that dilute existing shareholder value and could cause significant declines.
- A Speculative Bet. ZOM is bringing TRUFORMA to market relatively soon, and compared to other diagnostics platforms, it is expected to do overwhelmingly well thanks to its advantages in terms of time and coverage of illnesses. However, since the product has never hit the market in the past, it’s impossible to predict consumer adoption. A bet for the company is a bet that adoption will be strong, but if that’s not the case, significant declines may be the result.
- Volatility. ZOM stock is known for high levels of volatility. This high volatility means that timing entrances and exits is more difficult. Moreover, while there’s potential for significant short-run gains, there’s also potential for significant short-run declines.
Sure, an investment in Zomedica will come with risk. But, the company has a couple of things going for it. First and foremost, the commercial launch of the TRUFORMA platform is exciting news, especially considering the fact that the company partnered with Miller Veterinary Supply for the commercialization, which will put it in front of plenty of potential customers.
Moreover, retail investors are all over ZOM stock, and as we’ve seen over the past few weeks, retail investors have the ability to move the needle in a big way when they band together. As a result, a short squeeze may continue, opening the door to tremendous short run gains.