It’s interesting that veterinary testing and pharmaceutical company Zomedica (NYSEAMERICAN:ZOM) has received so much attention lately. Under normal circumstances, one wouldn’t expect the trading volumes of ZOM stock to increase so rapidly.
Perhaps it has to do with the onset of the novel coronavirus. It’s possible that, due to the lockdowns, people have stayed home and paid more attention to their pets.
Or maybe the interest surrounding ZOM stock is simply a function of today’s market environment. After all, we’re living in a time when less-appreciated stocks are suddenly the targets of breathtaking rallies and short squeezes.
But I don’t advise owning Zomedica shares simply because you’re hoping for a Reddit raid. Instead, I’d like you to consider Zomedica’s potential as a power player in the pet diagnostics market.
A Closer Look at ZOM Stock
First, let it be said that ZOM stock is affordable for most portfolio sizes. In fact, it can be classified as a penny stock, defined by the U.S. Securities and Exchange Commission (SEC) as a stock that trades under $5 per share.
Not long ago, the bulls did attempt to push it out of penny-stock territory. Amazingly, the share price rallied to a 52-week high of $2.91 on Feb. 8.
I’m calling that rally “amazing” because ZOM stock was changing hands for less than 10 cents per share as recently as November 2020. Breaching the $3 level would have been mind-blowing, but apparently it wasn’t meant to happen yet.
Starting in mid-March, Zomedica’s share price took a sharp nosedive. By April 23, the stock was trading at around 94 cents.
That’s some wild price action, but it’s to be expected with low-priced assets. Consequently, please invest responsibly and only take a small position size if you choose to buy ZOM stock.
And one more note of caution: Zomedica’s trailing 12-month earnings per share is -5 cents. That’s not deeply negative, but the bulls will definitely want to see this number turn positive in the near future.
Branching Out
It was a watershed moment for Zomedica when the company, on March 16, revealed the commercialization of Truforma.
To put it simply, Truforma is designed to identify thyroid and adrenal issues in dogs and cats. Since Truforma is Zomedica’s flagship product, CEO Robert Cohen was justified in calling its commercialization a “a momentous day” for the company.
If you visit financial message boards, you’ll probably see ZOM stock traders talking about Truforma. Yet an SEC from Zomedia suggests that the company may be branching out soon.
In that filing, Zomedica reveals that it expects to “continue the development of another point-of-care diagnostic platform, which is based on miniaturized laser-based Raman spectroscopy technology and is designed to detect pathogens in companion animals.”
Then the company discloses that it has performed initial development work on a circulating tumor cell “liquid biopsy” platform that will be used to diagnose cancer in dogs.
Envisioning a Sales Army
It’s exciting to anticipate new and innovative products from Zomedica. However, they won’t generate much revenue without a strong sales and marketing push by the company.
To that end, it appears that Zomedica is preparing to significantly expand its direct sales network. According to its press release, Zomedica currently only employs eight direct field sales personnel. After reading what Zomedica Chief Commercial Officer Brük Herbst had to say, I expect that number to increase in the near future.
“A direct sales force will significantly improve our ability to serve our customers and to sell our products in the veterinary market in the longer term,” Herbst explained.
In my mind, I’m imagining a massive sales force, an army of people pushing Truforma to anyone within earshot.
Okay, so that’s probably just a fantasy. Still, it’s encouraging to see Zomedica prioritizing its sales efforts along with the company’s innovative product development.
The Bottom Line
It’s conceivable that the pullback in ZOM stock is coming to an end and that a rally is forthcoming.
And as Zomedica teases new products and shores up its sales force, its stakeholders should be more confident than ever.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.
