Zomedica Corp. (ZOM) Bundle
Understanding Zomedica Corp. (ZOM) Revenue Streams
Understanding Zomedica Corp.’s Revenue Streams
The following section provides a detailed analysis of the revenue streams for Zomedica Corp. as of 2024, highlighting key aspects such as revenue sources, growth rates, and contributions from different business segments.
Breakdown of Primary Revenue Sources
Zomedica Corp. generates revenue primarily from two segments: Diagnostics and Therapeutic Devices. The breakdown for the nine months ended September 30, 2024, is as follows:
| Segment | Net Revenue (2024) | Net Revenue (2023) | Percentage Change |
|---|---|---|---|
| Diagnostics | $1,670 | $1,016 | 64.5% |
| Therapeutic Devices | $17,720 | $16,833 | 5.3% |
| Total Revenue | $19,390 | $17,849 | 8.6% |
Year-over-Year Revenue Growth Rate
For the three months ended September 30, 2024, Zomedica Corp. reported revenues of $6,997, compared to $6,347 for the same period in 2023. This represents a year-over-year growth rate of 10%. For the nine months ended September 30, 2024, revenue was $19,390, an increase from $17,849 in 2023, translating to a growth rate of 8.6%.
Contribution of Different Business Segments to Overall Revenue
The contributions of the two segments to the overall revenue for the nine months ended September 30, 2024, are detailed below:
| Segment | Contribution to Total Revenue |
|---|---|
| Diagnostics | 8.6% ($1,670 out of $19,390) |
| Therapeutic Devices | 91.4% ($17,720 out of $19,390) |
Analysis of Significant Changes in Revenue Streams
In the Diagnostics segment, revenue increased significantly by 64.5% year-over-year, largely due to the introduction of new products and assays, specifically the TRUFORMA® and VetGuardian® products. Conversely, the Therapeutic Devices segment saw a modest growth of 5.3%, attributed to stable demand for existing products and the continued integration of new offerings.
Overall, the revenue growth reflects Zomedica's ongoing efforts to enhance its product offerings and expand its market presence, with expectations for further growth driven by increased sales and marketing initiatives.
A Deep Dive into Zomedica Corp. (ZOM) Profitability
A Deep Dive into Zomedica Corp.'s Profitability
Gross Profit Margin
For the three months ended September 30, 2024, the gross profit was $5,060 thousand, resulting in a gross profit margin of 72%, compared to 69% for the same period in 2023. For the nine months ended September 30, 2024, gross profit was $13,539 thousand, with a gross profit margin of 70%, up from 69% in 2023.
Operating Profit and Net Profit Margins
For the three months ended September 30, 2024, the loss from operations was ($7,440) thousand, leading to an operating profit margin of (106%). This compares to a loss from operations of ($5,948) thousand and an operating margin of (94%) for the same period in 2023. For the nine months ended September 30, 2024, the loss from operations was ($42,893) thousand, resulting in an operating margin of (221%), compared to (113%) for the prior year.
Net Profit
The net loss for the three months ended September 30, 2024, was ($6,697) thousand, leading to a net profit margin of (96%). This contrasts with a net loss of ($491) thousand and a net profit margin of (8%) for the same period in 2023. For the nine months ended September 30, 2024, the net loss was ($39,788) thousand, resulting in a net profit margin of (205%), compared to (68%) in 2023.
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Gross Profit | $5,060 | $4,362 | $13,539 | $12,245 |
| Gross Profit Margin | 72% | 69% | 70% | 69% |
| Operating Loss | ($7,440) | ($5,948) | ($42,893) | ($20,203) |
| Operating Margin | (106%) | (94%) | (221%) | (113%) |
| Net Loss | ($6,697) | ($491) | ($39,788) | ($12,123) |
| Net Profit Margin | (96%) | (8%) | (205%) | (68%) |
Trends in Profitability Over Time
Over the past year, the company has shown a significant increase in gross profit margins, reflecting improved operational efficiencies. However, the operating and net profit margins indicate ongoing challenges, with increasing losses primarily driven by higher operating expenses.
Comparison of Profitability Ratios with Industry Averages
The industry averages for gross profit margins in the medical device sector typically range from 60% to 70%. The company's gross profit margin at 72% for Q3 2024 aligns well with industry standards. However, the operating and net margins are below industry averages, which often show positive margins due to established product lines and lower relative expenses.
Analysis of Operational Efficiency
The company’s cost management efforts have led to a reduction in the cost of revenue to $1,937 thousand in Q3 2024, down from $1,985 thousand in Q3 2023. This reflects a 2% decrease in costs, despite an increase in revenue. The operational efficiency can be attributed to the integration of the Minnesota manufacturing facility, which has improved production processes.
Debt vs. Equity: How Zomedica Corp. (ZOM) Finances Its Growth
Debt vs. Equity: How Zomedica Corp. Finances Its Growth
Overview of the Company's Debt Levels
As of September 30, 2024, Zomedica Corp. reported total liabilities of $11,271 thousand, which includes both short-term and long-term debt. The company has no long-term debt obligations and its current liabilities primarily consist of accounts payable and accrued expenses. The breakdown is as follows:
| Liability Type | Amount (in $ thousands) |
|---|---|
| Accounts Payable | $2,376 |
| Accrued Income Taxes | $96 |
| Current Portion of Lease Obligations | $632 |
| Customer Contract Liabilities | $293 |
| Accrued Expenses and Other Current Liabilities | $4,667 |
Debt-to-Equity Ratio and Comparison to Industry Standards
The debt-to-equity ratio for Zomedica Corp. as of September 30, 2024, stands at approximately 0.06, calculated using total liabilities of $11,271 thousand and total shareholders' equity of $202,844 thousand. This ratio is significantly lower than the industry average, which typically ranges between 0.5 to 1.5 for similar companies in the veterinary and biotechnology sectors.
Recent Debt Issuances and Credit Ratings
In the latest financial period, Zomedica Corp. did not engage in any new debt issuances. The company has maintained a conservative approach to financing, relying primarily on equity financing to support its growth initiatives. As of the latest reports, there are no formal credit ratings available for Zomedica, reflecting its relatively recent market presence and ongoing development phase.
How the Company Balances Between Debt Financing and Equity Funding
Zomedica has primarily funded its operations and growth through equity financing. The company has issued a total of 979,949,668 common shares, with additional paid-in capital of $32,292 thousand as of September 30, 2024. This strategy minimizes debt obligations and interest expenses, allowing for greater flexibility in financial planning.
In the nine months ended September 30, 2024, Zomedica reported a net loss of $39,788 thousand, which emphasizes the need for careful capital management. The company continues to evaluate its financing options, balancing the potential dilution of existing shareholders against the need for sufficient capital to fund research and development, marketing, and operational expenses.
The company’s total shareholders' equity and its reliance on equity financing are detailed in the following table:
| Equity Component | Amount (in $ thousands) |
|---|---|
| Common Stock | $380,973 |
| Additional Paid-In Capital | $32,292 |
| Accumulated Deficit | ($210,721) |
| Accumulated Comprehensive Income | $300 |
| Total Shareholders' Equity | $202,844 |
Assessing Zomedica Corp. (ZOM) Liquidity
Assessing Zomedica Corp's Liquidity
Current Ratio: As of September 30, 2024, the company reported a current ratio of 5.6, indicating a strong liquidity position with current assets significantly exceeding current liabilities.
Quick Ratio: The quick ratio, which excludes inventory from current assets, stood at 5.4, suggesting that the company can cover its short-term obligations without relying on the sale of inventory.
Analysis of Working Capital Trends
As of September 30, 2024, the working capital was reported at $79,206 thousand, indicating a positive trend in liquidity as the company continues to maintain sufficient current assets to cover its current liabilities.
Cash Flow Statements Overview
The cash flow statement for the nine months ended September 30, 2024, shows:
| Cash Flow Activity | 2024 (in thousands) | 2023 (in thousands) | Change (%) |
|---|---|---|---|
| Cash used in operating activities | $(19,105) | $(10,960) | 74% |
| Cash provided by investing activities | $15,938 | $5,406 | 195% |
| Cash used in financing activities | $(70) | $0 | N/A |
| Decrease in cash and cash equivalents | $(3,237) | $(5,554) | 42% |
| Cash and cash equivalents, end of period | $9,747 | $21,783 | (55%) |
The cash flows from operating activities reflect an increase in cash used by 74% compared to the previous year, primarily due to a higher net loss. However, cash provided by investing activities saw a significant increase of 195%, indicating stronger cash management in this area.
Potential Liquidity Concerns or Strengths
The company has reported an accumulated deficit of $210,721 thousand as of September 30, 2024, which poses a long-term liquidity concern. However, with a solid current and quick ratio, the company is positioned well for short-term liquidity needs. The reliance on equity financing to fund operations could lead to dilution for existing shareholders, representing a potential risk for investors.
Overall, while the company maintains robust liquidity ratios, ongoing losses and an accumulated deficit highlight the need for sustained revenue growth to enhance its financial health.
Is Zomedica Corp. (ZOM) Overvalued or Undervalued?
Valuation Analysis
To assess the financial health of the company, we will analyze its valuation metrics, including the price-to-earnings (P/E) ratio, price-to-book (P/B) ratio, and enterprise value-to-EBITDA (EV/EBITDA) ratio.
Price-to-Earnings (P/E) Ratio
The current P/E ratio is not applicable due to the company reporting a net loss of $39,788 for the nine months ended September 30, 2024.
Price-to-Book (P/B) Ratio
The P/B ratio can be calculated as follows:
- Book Value per Share = Total Shareholders' Equity / Number of Shares Outstanding
- Total Shareholders' Equity as of September 30, 2024: $202,844
- Number of Shares Outstanding: 979,949,668
- Book Value per Share = $0.207
- Current Stock Price (as of recent data): $0.05
- P/B Ratio = Stock Price / Book Value per Share = 0.241
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
As of September 30, 2024, the EBITDA can be estimated as follows:
- Net Loss: $39,788
- Add Back: Interest Income: $3,108
- Add Back: Depreciation and Amortization: $5,936
- Estimated EBITDA = $39,788 + $3,108 + $5,936 = -$30,744
- Enterprise Value (EV) Calculation:
- Market Capitalization = Stock Price x Shares Outstanding = $0.05 x 979,949,668 = $48,997,483.4
- Total Debt: $11,271
- Cash and Cash Equivalents: $5,741
- EV = Market Cap + Total Debt - Cash = $48,997,483.4 + $11,271 - $5,741 = $60,002,013.4
- EV/EBITDA Ratio = Undefined (due to negative EBITDA).
Stock Price Trends
Over the last 12 months, the stock price has fluctuated:
- 12 months ago: $0.15
- Current Price: $0.05
- Percentage Change: -66.67%
Dividend Yield and Payout Ratios
The company does not currently pay dividends, resulting in a dividend yield of 0%.
Analyst Consensus on Stock Valuation
Analyst consensus indicates a rating of Hold based on the current financial performance and market conditions.
| Metric | Value |
|---|---|
| P/E Ratio | N/A (Net Loss) |
| P/B Ratio | 0.241 |
| EV/EBITDA Ratio | Undefined |
| Net Loss (9 months) | $39,788 |
| Current Stock Price | $0.05 |
| 12-Month Stock Price Change | -66.67% |
| Dividend Yield | 0% |
| Analyst Consensus | Hold |
Key Risks Facing Zomedica Corp. (ZOM)
Key Risks Facing Zomedica Corp.
The financial health of Zomedica Corp. is influenced by several internal and external risk factors that potentially impact its operations and market position. These risks include industry competition, regulatory changes, market conditions, operational inefficiencies, and financial uncertainties.
Industry Competition
In the veterinary diagnostics market, Zomedica faces intense competition from other firms that offer similar products and services. Key competitors are established players with significant market share, which could impede Zomedica's growth. As of September 30, 2024, the company reported a net revenue of $6,997 thousand for the third quarter, representing a 10% increase compared to $6,347 thousand for the same period in 2023. However, the competitive landscape continues to evolve, necessitating ongoing innovation and market penetration strategies.
Regulatory Changes
The company operates in a highly regulated industry, which exposes it to risks related to compliance with changing laws and regulations. Any significant changes in regulatory frameworks could lead to increased costs or operational challenges. Zomedica must navigate these regulations to maintain its market position and ensure product approvals. The potential impact of regulatory changes on the company’s operations is a crucial risk factor, particularly as it relates to the commercialization of new products.
Market Conditions
Fluctuations in market conditions, including economic downturns, can adversely affect consumer spending in the veterinary sector. Zomedica has reported an accumulated deficit of $210,721 thousand as of September 30, 2024, which emphasizes the ongoing challenges in achieving sustainable profitability. The company’s reliance on veterinary practices to purchase its diagnostic products makes it vulnerable to changes in the economic landscape that could affect these practices' financial health.
Operational Risks
Operational risks include potential inefficiencies in manufacturing and supply chain disruptions. The cost of revenue for the three months ended September 30, 2024, was reported at $1,937 thousand, slightly down from $1,985 thousand in the prior year. However, as the company scales its operations, any inefficiencies could lead to increased costs and affect margins. The integration of the Minnesota manufacturing facility is a critical area where successful execution is necessary to mitigate these risks.
Financial Risks
Zomedica has incurred substantial losses, with a net loss of $6,697 thousand for the three months ended September 30, 2024, compared to a net loss of $491 thousand for the same period in 2023. The company’s financial health is further challenged by ongoing negative cash flows from operations since its inception. Therefore, the ability to raise additional capital is essential to fund operations and growth initiatives. The company’s reliance on equity financing exposes it to the risk of dilution for existing shareholders.
Mitigation Strategies
To address these risks, Zomedica is focused on enhancing its product portfolio and improving operational efficiencies. The company has increased its research and development expenses to $5,122 thousand for the nine months ended September 30, 2024, up from $2,645 thousand in 2023, indicating a commitment to innovation and product development. Furthermore, strategic marketing efforts aim to bolster brand awareness and customer engagement, which are critical to navigating competitive pressures.
| Risk Factor | Description | Current Impact |
|---|---|---|
| Industry Competition | Intense competition from established players | Revenue growth at $6,997 thousand, 10% increase |
| Regulatory Changes | Compliance with evolving regulations | Potential operational challenges |
| Market Conditions | Fluctuations affecting consumer spending | Accumulated deficit of $210,721 thousand |
| Operational Risks | Manufacturing and supply chain disruptions | Cost of revenue $1,937 thousand |
| Financial Risks | Substantial losses and negative cash flows | Net loss of $6,697 thousand |
Future Growth Prospects for Zomedica Corp. (ZOM)
Future Growth Prospects for Zomedica Corp.
Analysis of Key Growth Drivers
Key growth drivers for the company include:
- Product Innovations: The launch of new assays for the TRUFORMA® product line has contributed to revenue growth, with a strong performance in consumables and capital sales.
- Market Expansions: The company continues to expand its market presence through strategic marketing and commercialization efforts.
- Acquisitions: Integration of acquired operations, such as the Minnesota manufacturing facility, is expected to enhance production efficiency.
Future Revenue Growth Projections and Earnings Estimates
Revenue for the three months ended September 30, 2024, was $6,997, compared to $6,347 for the same period in 2023, representing a growth of 10%. For the nine months ended September 30, 2024, revenue was $19,390, up from $17,849, an increase of 9%.
Strategic Initiatives or Partnerships
Strategic initiatives include:
- Partnerships with Brisby Inc. for the development of new products, including the Smart Pet Pad and the Intelligent Pet Bed, which are expected to drive future sales.
- Ongoing clinical studies and marketing efforts aimed at increasing the adoption of existing products.
Competitive Advantages
The company holds several competitive advantages:
- Strong Product Portfolio: The diverse range of products in both diagnostics and therapeutic devices segments positions the company well for market penetration.
- Improving Margins: Gross profit margin for the three months ended September 30, 2024, was 72%, an increase from 69% in the prior year.
- Efficient Manufacturing: The recent acquisition of the Minnesota facility is expected to reduce costs and improve production capabilities.
Financial Data Summary
| Metric | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Revenue | $6,997 | $6,347 | $19,390 | $17,849 |
| Cost of Revenue | $1,937 | $1,985 | $5,851 | $5,604 |
| Gross Profit | $5,060 | $4,362 | $13,539 | $12,245 |
| Net Loss | $6,697 | $491 | $39,788 | $12,123 |
| Loss per Share | $0.01 | $0.00 | $0.04 | $0.01 |
As of September 30, 2024, the company had an accumulated deficit of $210,721. The working capital stood at $79,206.
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Resources:
- Zomedica Corp. (ZOM) Financial Statements – Access the full quarterly financial statements for Q3 2025 to get an in-depth view of Zomedica Corp. (ZOM)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Zomedica Corp. (ZOM)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.