In case you haven't been paying attention, pets are responsible for a growing portion of the economy right now. Pandemic-fueled isolation has accelerated a long-running trend of increasing pet adoption, and soaring demand for veterinary services.

Anyone that's taken their fur baby to the vet for a serious condition knows diagnostic services can be expensive, and slow. That's why everyone's been talking about Zomedica (ZOM -0.84%) and its recently launched diagnostic tool for adrenal gland and thyroid gland conditions. 

A team of healthcare professionals is gathered around a table in a conference room.

Image source: Getty Images.

Zomedica's Truforma system isn't much bigger than a toaster and it can produce results on the fly. Demand for this innovative solution could drive sales of the diagnostic tool and the company's stock price through the roof over the next several quarters.

Before you add any Zomedica shares to your portfolio, though, there are a few things about this company that you should consider first.

1. Turning the corner

Up until March 16, Zomedica was a development-stage company with research and development expenses but no source of revenue to pay them. 

To fuel the commercial launch of its Truforma system Zomedica raised an impressive $217 million this year, bringing its cash balance to a healthy $278 million as of Feb. 26. That looks like a healthy cushion for a company that lost just $17 million last year, but that was while it was a developmental-stage company with less than two dozen employees.

Hiring a sales staff to launch Truforma will boost expenses and even Zomedica doesn't know how expensive turning the commercial-stage corner will become. The company didn't provide any forward guidance with its fourth-quarter earnings report. 

2. Validation data?

Last November, Zomedica initiated validation of its assays after reporting successful verification study results. When the company ran cortisol and thyroid hormone tests on equipment from Seimens, the results fell in line with those reported by Truforma. When Zomedica reported 2021 earnings in February, though, validation efforts for the company's tests were still under way.

The initial launch of the Truforma platform could be extra challenging because veterinarians still can't be certain the results Truforma produces will be as accurate as results they're used to receiving from outside laboratories. It might be a good idea to wait for that validation data, or at least wait for sales growth that indicates veterinarians aren't bothered by its absence. 

3. Big expectations

Investors expecting great things from Zomedica have driven the stock's market cap up to a whopping $1.9 billion at recent prices. That's an awfully big valuation for a company that has only just started recording sales. Point-of-care diagnostic products are increasingly popular with doctors that treat people, but nobody's really tried to market them to veterinarians yet. 

Zomedica's headquartered in Michigan, but its first customer was the president of a giant animal care hospital in New York. If sales of Truforma are limited to giant operations like this one, Zomedica won't have a chance to live up to the expectations the stock market has placed on it. 

Stay patient

Zomedica's Truforma is the first and only diagnostic platform that relies on bulk-acoustic wave technology. While this could be a huge advantage, new diagnostic products that excite investors before their commercial launch end up disappointing them more often than they succeed.

It doesn't cost anything to let a hot opportunity pass you by, but you could suffer heavy losses if Zomedica doesn't begin reporting impressive sales over the next several quarters. Before you risk your hard-earned money, it's probably best to wait for signs of a successful launch in the company's upcoming earnings reports.