Zomedica Stock Price and News: ZOM Shares fall as valuation too high
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Subscribe to Premium- Zomedica shares have suffered since sale of its first Truforma product.
- ZOM shares recovered on Friday, closing up 2%.
- The stock is still up significantly in 2021 as retail investors back it strongly.
Update March 22: ZOM shares are 4% lower in Monday's early pre-market, as hopefully investors realize before it is too late that they have stretched the valuation of this one too far. Truforma may have had its first sale, but ZOM is valued at nearly the entire market it operates in after retail traders jumped in and pushed the valuation to hugely inflated levels. Zomedica shares will come back to earth once the market comes to terms with this and once sales and revenue figures show just how far out of line the valuation has become. ZOM is likely not a worthless company, but it is not worth over $2 billion as it stands currently.
Zomedica (ZOM) was founded in 2015 in Ann Arbour, Michigan. The company is involved in developing diagnostic and therapeutic products for the veterinary industry. ZOM has a number of treatments in development for cat-and-dog digestive issues. Most investor focus has been on the company's Truforma diagnostic platform, due to launch in March 2021.
ZOM stock forecast
ZOM shares have been on a charge in 2021. The stock opened the year at $0.25 before receiving attention from retail traders. The shares were quickly bid up to $2.91 by February, but since then it has seen a steady decline.
Traders were optimistic over its Truforma platform helping veterinary diagnostics in the booming pet industry.
Results for Q4 2020 are to be released on Wednesday, February 24. While investors will focus on the results, it will be the outlook and any further news on the Truforma rollout that will turn heads.
ZOM stock news
Shares in ZOM have been boosted by retail investor sentiment. Most have cited the upcoming launch of the company's Truforma diagnostic product, expected in March 2021. News on the rollout of this platform will be eagerly anticipated, more so than the actual results themselves. ZOM has recently raised significant funds via a bought deal, which gives the company funds to grow the business. But having funds means you have to know how to use them, and this is why the outlook and results statement will possibly be more important than the EPS figure.
Should I buy shares in Zomedica (ZOM)?
Shares can stray far from underlying fundamental metrics, as we all have seen this year with GameStop (GME). Share prices are determined by the law of supply and demand and also perceived supply and demand, and thus can move away from underlying financial metrics for a period of time. But typically only for a short period of time. Therefore, extreme caution and extremely sensitive risk management are needed. Trading right around results releases can also be risky as investors focus on different areas of the results, sales, EPS and outlook, among other factors. Better to digest the numbers and develop a long-term strategy for the stock.
Previous updates
Update: ZOM shares continue to suffer from post-Truforma sale as investors likely move on to the next meme name, or back to the king, in GameStop. ZOM does have a solid investment case but not at this level with a $1.99 billion market capitalization in a market that in its entirety is worth just over $2 billion for diagnostic pet products.
Maybe investors have realized they have pushed the valuation too far or maybe they have moved into the next meme stock. Either way ZOM shares have been struggling, despite the positive news, which is never a good sign.
Update: ZOM shares were lower on Tuesday despite the company saying it had made its first sale of ZOM's Truforma diagnostic platform ahead of schedule.
"This is a momentous day for Zomedica, our shareholders, the veterinarians we serve, and the companion animals in their care," commented Robert Cohen, Zomedica's Chief Executive Officer. "It is a credit to both our employees and to the stellar team with whom we have worked at our development partner, Qorvo Biotechnologies LLC, that we have created a unique and valuable diagnostic tool, and have delivered it to the veterinary market slightly ahead of our previously announced schedule."
The author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
This article is for information purposes only. The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice. It is important to perform your own research before making any investment and take independent advice from a registered investment advisor.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to accuracy, completeness, or the suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. The author will not be held responsible for information that is found at the end of links posted on this page.
- Zomedica shares have suffered since sale of its first Truforma product.
- ZOM shares recovered on Friday, closing up 2%.
- The stock is still up significantly in 2021 as retail investors back it strongly.
Update March 22: ZOM shares are 4% lower in Monday's early pre-market, as hopefully investors realize before it is too late that they have stretched the valuation of this one too far. Truforma may have had its first sale, but ZOM is valued at nearly the entire market it operates in after retail traders jumped in and pushed the valuation to hugely inflated levels. Zomedica shares will come back to earth once the market comes to terms with this and once sales and revenue figures show just how far out of line the valuation has become. ZOM is likely not a worthless company, but it is not worth over $2 billion as it stands currently.
Zomedica (ZOM) was founded in 2015 in Ann Arbour, Michigan. The company is involved in developing diagnostic and therapeutic products for the veterinary industry. ZOM has a number of treatments in development for cat-and-dog digestive issues. Most investor focus has been on the company's Truforma diagnostic platform, due to launch in March 2021.
ZOM stock forecast
ZOM shares have been on a charge in 2021. The stock opened the year at $0.25 before receiving attention from retail traders. The shares were quickly bid up to $2.91 by February, but since then it has seen a steady decline.
Traders were optimistic over its Truforma platform helping veterinary diagnostics in the booming pet industry.
Results for Q4 2020 are to be released on Wednesday, February 24. While investors will focus on the results, it will be the outlook and any further news on the Truforma rollout that will turn heads.
ZOM stock news
Shares in ZOM have been boosted by retail investor sentiment. Most have cited the upcoming launch of the company's Truforma diagnostic product, expected in March 2021. News on the rollout of this platform will be eagerly anticipated, more so than the actual results themselves. ZOM has recently raised significant funds via a bought deal, which gives the company funds to grow the business. But having funds means you have to know how to use them, and this is why the outlook and results statement will possibly be more important than the EPS figure.
Should I buy shares in Zomedica (ZOM)?
Shares can stray far from underlying fundamental metrics, as we all have seen this year with GameStop (GME). Share prices are determined by the law of supply and demand and also perceived supply and demand, and thus can move away from underlying financial metrics for a period of time. But typically only for a short period of time. Therefore, extreme caution and extremely sensitive risk management are needed. Trading right around results releases can also be risky as investors focus on different areas of the results, sales, EPS and outlook, among other factors. Better to digest the numbers and develop a long-term strategy for the stock.
Previous updates
Update: ZOM shares continue to suffer from post-Truforma sale as investors likely move on to the next meme name, or back to the king, in GameStop. ZOM does have a solid investment case but not at this level with a $1.99 billion market capitalization in a market that in its entirety is worth just over $2 billion for diagnostic pet products.
Maybe investors have realized they have pushed the valuation too far or maybe they have moved into the next meme stock. Either way ZOM shares have been struggling, despite the positive news, which is never a good sign.
Update: ZOM shares were lower on Tuesday despite the company saying it had made its first sale of ZOM's Truforma diagnostic platform ahead of schedule.
"This is a momentous day for Zomedica, our shareholders, the veterinarians we serve, and the companion animals in their care," commented Robert Cohen, Zomedica's Chief Executive Officer. "It is a credit to both our employees and to the stellar team with whom we have worked at our development partner, Qorvo Biotechnologies LLC, that we have created a unique and valuable diagnostic tool, and have delivered it to the veterinary market slightly ahead of our previously announced schedule."
The author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
This article is for information purposes only. The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice. It is important to perform your own research before making any investment and take independent advice from a registered investment advisor.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to accuracy, completeness, or the suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. The author will not be held responsible for information that is found at the end of links posted on this page.
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