Investors in veterinary testing and pharmaceutical company Zomedica (NYSEAMERICAN:ZOM) stock have had their share of ups and downs this year. For traders seeking fast action, ZOM stock hasn’t disappointed them in 2021 so far.
Sure, you can trade the stock if you have nimble market timing. But what if you’re in the market for a solid buy-and-hold position?
If that’s the case, then you’re going to want to learn more about Zomedica’s flagship product and the recently announced milestone related to it.
We’ll certainly delve into those topics, along with the growth potential of the broader pet diagnostics market. First, however, it’s imperative that we examine the recent price action of Zomedia shares.
A Closer Look at ZOM Stock
A brief glance at ZOM reveals that this is not an investment for the faint of heart. This one’s volatile, so it’s not appropriate for large positions.
At the end of 2020, the shares were trading at around 23 cents apiece. Yet, by Jan. 12, the stock had zoomed up to $1.30. And, that’s not even the end of the bull run.
The ZOM stock buyers took a breather for several weeks, but then catapulted the share price up to $2.91 on Feb. 8. That marked the stock’s 52-week high.
If you’re concerned about buying the stock at its peak price, no need to worry. The shares have pulled back since early February and trade today around $1.50.
So, perhaps you’ll be able to buy ZOM stock at a bargain price. Also worth noting is that the company’s earnings per share on a trailing 12-month basis is -5 cents.
Hopefully, Zomedica can get that number into positive territory in the near future.
Vast Market Opportunity
Perhaps you’ve never thought about investing in the pet diagnostics market. I’ll admit, it’s not exactly the most talked-about topic in the financial media.
However, after examining some of the data, you might be persuaded to take a small position in this market and, therefore, in ZOM stock.
Zomedica offered up a compelling bull thesis for the pet diagnostics market in the company’s Securities and Exchange Commission (SEC) 10-K form.
Here are the relevant stats, courtesy of Zomedia:
- 67% of households (nearly 85 million homes) in the U.S. have at least one pet.
- The average life span for dogs has increased to 15.4 years, and companion animals are generally living longer.
- 93% of dog-owning households visit the veterinarian annually.
- It’s estimated that U.S. consumers were expected to have spent $99 billion on their pets in 2020.
- The companion animal diagnostics market is forecast to reach $2.8 billion by 2024, at a compounded annual growth rate (CAGR) of 9.8% from 2019 to 2024.
- In addition, the global veterinary immunodiagnostic market has been predicted to expand at a CAGR of 9.6% and reach $2.1 billion by the year 2022.
A Major Milestone
By now, you should be convinced that Zomedica’s addressable market is vast and worth pursuing, but without a significant product launch, it would be awfully difficult for Zomedica to capitalize on this opportunity.
Thankfully, a recent announcement puts this concern to rest. A press release from March 16 proudly revealed the first commercialization of Truforma.
Louis Navellier and the InvestorPlace research staff did a terrific job of summarizing the Truforma diagnostic platform, which is designed to identify thyroid and adrenal issues in dogs and cats:
“Instead of shipping a blood test to a third-party lab, veterinarians and technicians can use the product to run the tests themselves… That makes the diagnostic process quicker and cheaper — two factors that will definitely appeal to worried pet owners.”
In what Zomedica CEO Robert Cohen called a “momentous day” (and I agree), the company recorded the first veterinarian sale of Truforma.
Truforma’s previously disclosed commercialization target date had been set for March 30. Thus, the commercialization appears to be moving forward ahead of schedule, which isn’t a bad thing at all for Zomedica.
The Bottom Line
It’s all about the baby steps – first one veterinarian sale of Truforma, and later (hopefully) many more sales.
Given the vast size of the pet diagnostics market, it’s not difficult to envision Zomedica achieving many more milestones in 2021.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.