Headquartered in Ann Arbor, Michigan, Zomedica Pharmaceuticals (NYSEAMERICAN:ZOM) offers a product portfolio focused on addressing the unmet needs of clinical veterinarians. If you’re wondering whether there’s a real potential for returns in this niche, check the price action of ZOM stock and you should be convinced.
On the morning of Jan. 11, ZOM stock was up by an astounding 85%. That took place after the stock already experienced a massive multi-week run-up.
Whether you’re going to view this as bullish or bearish depends on your perspective as an investor. From a technical point of view, there’s no denying that the bulls are fully in charge of the price action.
On the other hand, skeptical investors might choose to stop and consider whether the move in ZOM stock is truly justified. If there’s not enough value there, then it might be best to just stay on the sidelines.
A Closer Look at ZOM Stock
Most of 2020 wasn’t all that great for ZOM stock holders. The stock started the year at around 33 cents. After some chopping around, the share price sagged to a 52-week low of approximately six cents on Nov. 6.
Anyone who was shaken out of their long position is probably regretting it today. That’s because the ZOM stock price popped to 17 cents by Nov. 17, and then powered its way up to 23 cents by the end of the year.
That was already quite impressive. Yet, it was just the beginning. By Jan. 12, ZOM stock was up to $1.30 before cooling off a bit. Today it will open at just below $1.
At the same time, value-focused investors might have noticed that the trailing 12-month earnings per share for ZOM stock was around negative six cents.
That could be considered a bright red flag for cautious investors. Zooming price action, plus negative earnings on a per-share basis, could add up to trouble in the near future.
Why the Moon Shot?
After searching high and low for a catalyst, there didn’t seem to be any new company-specific news to propel ZOM stock.
It’s not hard to identify catalysts from past weeks, however. That’s especially true when we have help from the top-notch contributors at InvestorPlace.
In November, contributor Sarah Smith reported that Zomedica Pharmaceuticals announced its plan to begin commercialization of its Truforma point-of-care diagnostics platform by March of this year.
The Truforma platform, according to the company, is designed “to test a range of samples including whole blood, serum, and plasma.” Among its objectives is to detect certain thyroid and adrenal disorders in dogs and cats.
There’s an innovative edge here as Truforma may be the first company to use bulk acoustic wave technology to help detect thyroid and adrenal diseases in dogs and cats.
An Industry Veteran Signs On
Moreover, Zomedica appears to have a competitive advantage as the company has 70 issued or pending patents on Truforma.
The Truforma platform isn’t currently available for sale, and it is limited to investigational use only. Clearly, achieving further milestones in terms of regulatory approval of Truforma could send ZOM stock higher.
But then, ZOM stock has already been pushed much higher in recent weeks. This was likely helped along by a recent news item. In particular, Zomedica announced that it had appointed Robert Cohen as the company’s CEO, effective Jan. 1, 2021.
Cohen is a med-tech veteran with “more than 30 years of executive leadership and operations experience from the medical device, biotechnology and pharmaceutical industries.” So, investor enthusiasm is understandable.
Still, it appears that the ZOM stock bulls might have gotten ahead of themselves. The recent news is encouraging, but when trader sentiment pushes too far into the “greed zone,” a price pullback could be imminent. This very well may be what we’re seeing today.
The Bottom Line on ZOM Stock
The pet-care pharmaceutical market is promising, no doubt. And, Zomedica Pharmaceutical is pushing the boundaries of this niche with its innovative Truforma platform.
Plus, bring industry veteran Cohen on board should benefit Zomedica and its stakeholders. Nonetheless, value-focused investors might worry about ZOM stock pulling back after its wild price run.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.
