What a year it has been so far for Zomedica (NYSEAMERICAN:ZOM). Who could have imagined that it would be so challenging to invest in veterinary testing and pharmaceutical product specialist? Suffice it to say, ZOM stock has taken its traders on a wild roller-coaster ride.
Zomedica is a company that’s trying to save animals’ lives and make the world a better place. At the same time, the company’s stock has wreaked havoc on some traders, while enriching others.
Not everyone is prepared to handle this level of volatility. Frankly, if you would prefer to just avoid ZOM stock altogether, I fully understand.
On the other hand, the company may be preparing for a turnaround as Zomedica navigates its way through challenging times. So, if you can manage the risks, there could be a highly promising investment opportunity here.
A Closer Look at ZOM Stock
There’s no denying that ZOM could continue to be volatile in the coming months. That being said, it’s likely that the second half of 2021 will be calmer than the first 6 months were for Zomedica’s investors.
Believe it or not, the stock was trading at around 23 cents at the beginning of the year. But then, all hell broke loose.
In a stunning move, the buyers pushed the ZOM stock price up to $1.30 in January 2021. As if that weren’t enough, they then propelled it to a 52-week high of $2.91 on Feb. 8.
Thus, in just a couple of months, the Zomedica share price was up by 1,000+%. How could this have happened?
There wasn’t any specific news item, which would have justified a price move of this magnitude. Most likely, social media traders staged a short-squeeze operation.
Apparently, that operation left some traders in the lurch as ZOM stock started collapsing in early February. By mid-August, the share price had declined to around 48 cents.
Putting Losses in Perspective
Now that the stock price has come back to earth, it’s a good time to assess where Zomedica stands today and whether its future prospects are bright.
Maybe we can find some good news — or at least, some hopeful signs — in Zomedica’s second-quarter data release.
Assuredly, this is a tiny company. For 2021’s second quarter, Zomedica generated a total of $15,693 in revenues.
That dollar figure might not sound very impressive. Keep in mind, though, that Zomedica didn’t commercialize its flagship Truforma product until March 15.
Truforma is a pet diagnostics platform that’s primarily marketed toward veterinarians. Zomedica’s income depends largely upon the success of this particular product.
What to Look Forward To
When a product has just entered into the commercialization phase, money typically has to be spent up front, in hopes of strong returns later on.
Therefore, Zomedia’s second-quarter net earnings loss of $4.7 million shouldn’t be a deal breaker for the company’s loyal investors. Moreover, there are anticipated upcoming events in this year’s second half, which could catalyze a turnaround for Zomedica.
For now, the company’s stakeholders should be patient as the full commercialization of Truforma is pending the achievement of certain milestones.
“We expect that market adoption of TRUFORMA® will be challenging until our fT4 and ACTH assays are available for commercial release,” Zomedica explained.
Nevertheless, the company is preparing to move forward.
“We expect that the fT4 assay will be available for commercial sale in the fall of 2021 and that the ACTH assay will be available for commercial sale by the end of 2021,” Zomedica assured.
The Bottom Line
Undoubtedly, some folks profited from the wild moves in ZOM stock.
However, not everyone wants to invest in a highly volatile stock. Some people just want to stake their capital in business with an optimistic outlook.
Hopefully, any obstacles on the path to full commercialization for Truforma can and will be overcome.
If and when that happens, Zomedica’s ambitious vision for Truforma should soon be fulfilled — and at the same time, ZOM stock could be headed for much higher prices.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.