Zomedica Corp (ZOM) Stock Continues to Underperform: Here is Why

Over the past months, Zomedica Corp (NYSEAMERICAN:ZOM) has seen its stock go on a bit of a rollercoaster ride and investors might be wondering if it might be worth backing the stock. The company launched its Truforma diagnostic platform for animals earlier this year but despite that, the stock has been stuck in a phase of stagnation.

That being said, experts believe that its diagnostic does in fact have the potential of being a revenue-generating product. However, investors who have jumped into the stock at this point are possibly convinced that Truforma is going to turn into a commercial success. Whether the product can become a commercial success or not is still up for debate since at the end of the day there are several factors at play.

One of the things that investors need to remember is that the company has made some structural changes in its sales strategy when it comes to Truforma. As a matter of fact, the Zomedica management has admitted that the ‘adoption curve’ of the product might get delayed as a result of those changes. In other words, the company believes that the adoption of Truforma might take longer than expected.

That is something that is a potential red flag for many investors considering the fact that the success of Truforma is going to determine the fortunes of its stock. The move to a direct sales approach is yet to bear fruit in any meaningful way and hence, investors might consider sitting on the sidelines for a bit longer when it comes to the Zomedica stock.

Zomedica (ZOM) Stock May Get Attention After The Recent Sell-Off

Over the course of the year so far, the Zomedica (NYSEAMERICAN:ZOM) stock has had a rollercoaster run so far this year. At this point, the stock is trading at less than $1 a share and investors might be interested in seeing if the stock can go past that level again.

In this situation, it might be necessary for investors to take a closer look at the company and its business. The company currently boasts of one major product, the Truforma diagnostic platform for cats and dogs, which was launched in March this year. Experts believe that Zomedica, like many other penny stocks remains a speculative play; however, there are certain compelling arguments to be made regarding the stock.

It was not too long ago that the Zomedica stock was trading at $2 a share and before it can retrace its way to those levels, the company perhaps needs to ensure that it continues to grow its sales. It is sometimes possible for companies to grow if they can concentrate wholeheartedly on one thing and in case of Zomedica it is its sales.

It goes without saying that such a strategy can and often does lead to losses. However, at the same time the company is going to get the advantages that come with economies of scale.

When that happens, Zomedica will then be able to come up with other diagnostic products which will go a long way in building an entirely new ecosystem and eventually turn the company into a major player in the animal healthcare industry.

That will then turn the company from depending on the sales of its solitary product; Truforma and help in bringing about long-term growth. Zomedica has already started working on boosting its sales in a big way and recently decided to speed up the establishment of a direct sales model. These are important factors that could help the company in generating meaningful growth in the long term.  

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