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Zomedica: Buy, Sell, or Hold?

In the basket of retail investors, the penny stock, Zomedica Corp. (NYSE: ZOM) has been in murky waters for quite some time now, with more than 33% decline in its share price, following the last earnings release in November. It seems that investors have turned bearish on this penny stock. 

Though the stock had skyrocketed to a 52-week high at $2.91, there seems to be no catalyst to drive the stock to bounce back in recent times.  

Notably, the CEO of Zomedica, Larry Heaton will discuss the company’s overview at the upcoming virtual H.C. Wainwright BioConnect 2022 Conference. It is scheduled for January 10-13, 2022.  

Zomedica is a veterinary health company that offers point-of-care diagnostics and therapeutic products for companion animals. The company is engaged in the development and commercialization of TRUFORMA, a diagnostic biosensor platform to detect thyroid disorders in dogs and cats, and adrenal disorders in dogs. 

Earnings Recap 

Zomedica recorded a third-quarter 2021 net loss of $6.3 million, or $0.01 per share, up from a loss of $5 million, or $0.01 per share reported in the same quarter last year. Notably, lower research and development (R&D) costs were offset by a rise in selling, general and administrative (SG&A) expenses.

Additionally, the company recorded sales of $22,514 in the quarter, with limited sales from TRUFORMA, which initiated commercialization in March. 

Though with supply-chain headwinds, the performance of TRUFORMA was minimal, it is expected to improve as per the company’s expectations once commercialization improves. 

Moreover, the company’s strategy of continuing mergers and acquisitions should bode well. Notably, including the acquisition of PulseVet, Zomedica still had pro forma cash and cash equivalents of approximately $199.5 million as of September 30, 2021. 

Risk Analysis 

According to the new TipRanks’ Risk Factors tool, Zomedica stock is at risk mainly from three factors: Finance and Corporate, Production, and Ability to Sell, which contribute 48%, 15%, and 11%, respectively, to the total 62 risks identified for the stock.

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