Zomedica Corp. (ZOMDF) stock intrinsic value fair value estimate & owner earnings analysis

Zomedica sells products to veterinarians who treat dogs, cats and horses. It has three parts. Therapeutic Devices (about 82% of 2025 revenue of $32.0 million) is anchored by the PulseVet shockwave system, acquired in October 2021, plus Assisi and VETIGEL. Diagnostics, including the TRUFORMA in-clinic testing platform, is about 9%. Development Services, contract manufacturing and engineering for outside customers, is about 9% and first appeared in 2025. Revenue grew 17% in 2025 and 36% in the first half of 2026 ($18.3 million versus $13.5 million). Gross margin is high at 68%. The business has never produced positive owner earnings. Owner earnings are operating cash flow after removing working-capital swings, minus stock compensation and the part of capital spending needed to maintain the business (spending on growth is excluded). On that basis the company lost about $0.021 per share in 2021, $0.017 in 2022, $0.033 in 2023, $0.031 in 2024 and $0.019 in 2025. The 2025 loss was $19.1 million, an improvement of about 37% on 2024. Only these five years are shown because the company had no revenue in 2020 and acquired PulseVet in October 2021. The reported 2025 net loss of $81.9 million is much larger because it includes $55.8 million of non-cash write-downs of goodwill, intangibles and equipment, taken after the shares were removed from NYSE American on March 4, 2025 (they now trade on the OTCQB market). Those write-downs cost no cash and are not counted against owner earnings. The 2023 figure includes about $10.4 million of capital spending that we treated as maintenance, because it was far above the growth spending implied by the company's normal ratio of capital spending to sales. What the shares are worth therefore depends on how long the company burns cash and how much it has. At December 31, 2025 it held $9.0 million of cash and $44.2 million of available-for-sale securities, $53.3 million in total, about $0.054 per share on 980 million shares. We estimate roughly $45 million was left at mid-2026, after $7.8 million of operating cash outflow in the first half. That cash is the only value we can point to with certainty. We did not credit any future profit, because moving from losses to profits depends on costs staying flat while sales grow, and the company has not yet shown a profitable year. The company states that it believes its existing cash is sufficient for the next twelve months and beyond. Bear case, $0.00 per share. Owner earnings stay at the 2025 loss of about $19 million a year with no further improvement. That consumes the roughly $45 million in about two and a half years and leaves essentially nothing for shareholders, so we set this case at zero. The risk is real because Therapeutic Devices, largely PulseVet, is about 82% of revenue, and the $2.0 million of engineering revenue in 2025 came from a new business line with no track record of repeating. Base case, $0.0035 per share. Losses settle at about $17 million a year, the first-half 2026 pace, and stay there. We credit that much because cash used in operations fell by $6.0 million in 2025 and by a further $4.3 million in the first half of 2026 against the first half of 2025, and a cost reduction already made is not a forecast. We credit nothing beyond it. The cash lasts a little over two and a half years, and about $45 million less roughly $41.6 million (the present value of those losses) leaves about $3.4 million, or roughly $0.0035 a share. Bull case, $0.025 per share. The recent pace of improvement continues: cash used in operations fell $6.0 million in 2025 and a further $4.3 million in the first half of 2026 against a year earlier. The yearly owner-earnings loss falls to about $15 million in 2026, $10 million in 2027 and $5 million in 2028, and reaches breakeven in 2029. Roughly $45 million of cash less about $20 million (the present value of those losses) leaves about $25 million, or $0.025 a share. We assign no value to profits after breakeven, because higher margins on future sales are a hope rather than something the record shows. The difference between the cases is the length of the cash burn, not the size of the business. The shares would be worth far more than we show if the company reaches sustained profitability, and we cannot support that from its history. Dilution is a further risk: the company states that if it raises money by issuing equity, existing shareholders will likely be diluted, which would reduce each share's claim on the cash. We could not confirm from the filings how much of the securities portfolio matures before mid-2026, so our mid-2026 cash figure is an estimate. The margin-of-safety price of $0.008 applies only if the company shows cash used in operations falling below about $2 million a quarter for two quarters in a row. Absent that, the base case of $0.0035 leaves too little margin for a business with no record of profit.