14-day Premium Trial Subscription Try For FreeTry Free

Zomedica Corp Shows Modest Uptick in Price, Technical Analysis Suggests 'Hold'

StockInvest.us, 2 months ago

Zomedica Technical Analysis

Zomedica Corp, ticker symbol ZOM, has recently shown a modest uptick in price, with a last closing of $0.2176 on December 22, 2023. The stock has been trading within a narrow range between the daily low of $0.21 and a high of $0.22, indicating a relative stabilization after the observed movements. Notably, ZOM has touched a year-high of $0.335 which showcases a significant retracement from those peak levels, and a year-low of $0.15, suggesting volatility over the year.

One of the critical technical indicators, the Relative Strength Index (RSI14), stands at 72, which is commonly recognized as overbought territory. Typically, an RSI above 70 may signal that the stock could be ripe for a bearish retracement, as it may have been overextended.

The comparison between the 50 Day Moving Average at $0.17332 and the 200 Day Moving Average at $0.192815 reflects a bullish crossover with the stock trading above both averages, signaling a positive trend in the intermediate term. The Moving Average Convergence Divergence (MACD) sits at a marginally positive 0.000477, indicating potential momentum to the upside, but with limited strength behind the signal.

Furthermore, the Average True Range (ATR) is 5.63, which might suggest notable volatility in its price action. ZOM’s established support is at $0.2062, while it faces immediate resistance at $0.2201. Any breach of these levels could dictate the next direction for the stock.

Lastly, the volume metrics show trading activities are somewhat in line with the average, which may not provide a clear directional bias based on volume analysis alone.

Fundamental Analysis

Zomedica Corp operates within the market with a total market capitalization of $213.24 million, accompanied by a significant number of shares outstanding at around 979.95 million.

Zomedica The company shows an EPS (Earnings Per Share) of -$0.02 and a negative P/E (Price to Earnings) ratio of -10.88 due to its lack of profitability. Negative earnings indicate that the company has not been generating profits, which is a concern for potential investors. The next earnings announcement is expected on 03/13/2024, which will likely provide more insight into the company's operational performance and outlook.

Zomedica's discounted cash flow (DCF) calculation sits around $0.2181, slightly above its last close price, implying the stock might be reasonably valued at its current price level if future cash flows align with the DCF estimate.

Analysts' consensus ranks the stock as a "Buy" with 2 buys and no strong buy, hold, or sell ratings, which suggests a moderate level of optimism about the stock’s future price movement.

Predictions for the Stock's Performance

For the next trading day on December 26, 2023, considering the overbought RSI and lack of a strong bullish catalyst from the technicals, there is potential that the stock could retract slightly or experience consolidation around the current price levels.

Over the upcoming week, the bullish crossover of the moving averages could provide some positive sentiment, but investors will be watchful of whether the price can sustain above resistance or if it will succumb to any selling pressure from the overbought technical conditions.

Overall Evaluation

Considering the mix of technical indicators and the fundamental perspective, ZOM should likely be categorized as a 'Hold'. While the stock shows some positive technical setups like the bullish moving average crossover, the overextension indicated by the RSI and the company's lack of profitability highlighted by a negative EPS and P/E ratio advise caution.

Moreover, with earnings announcement not due until March 2024, there may be a lack of near-term catalysts to drive significant price movement. Given these factors, it’s prudent to wait for a better entry point or more robust fundamental improvements before considering an investment in ZOM. Investors should maintain a close watch on the stock, especially for any potential shifts in price that could occur if it challenges its resistance levels or retreats towards support.

Check full Zomedica forecast and analysis here.