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Zoono share price: where next as Coronavirus crisis intensifies

We examine some of Zoono's key fundamentals as well as a number of the company's operational ambitions for FY20.

Zoono: Where next? Source: Bloomberg

‘One is left wondering if this kind of price action is sustainable.’

That was one of the key points we made last week after the Zoono share price made new highs: It surged to $2.29 per share on 5 March, before giving up most of those gains in the following days.

The antimicrobial stock currently trades around the $1.44 mark, more than 40% off those highs, mind you. (Though the stock is still up ~1,600% over the last 12-months.)

Manias after all work both ways: yet they tend to be more pronounced on the way down, a notion well illustrated by the price action of equities from the last few days.

The ASX 200 collapsed 7.3% on Monday, then plunged another 3% in the first 30 minutes of trade today, though the market has rebounded a shade since then. The blue-chip benchmark is currently hovering around the 5,700 point mark, its lowest point since January 2019.

Across the globe there are now 114,299 cases of the Coronavirus (COVID-19) and 4,025 reported deaths.

Where do you stand: is this the start of larger share price declines or do you think Zoono will rebound? Trade accordingly. To go short (sell) or long (buy) on Zoono, using IG's world class trading platform, follow these simple steps:

  • Set up an IG Trading Account or log in to your existing account
  • Enter ‘Zoono’ or ‘ZNO’ in the search bar and select it
  • Choose your position size
  • Click on ‘buy’ or ‘sell’ in the deal ticket
  • Confirm the trade

Zoono share price: fundamentals in focus

Looking at Zoono’s most recent half-yearly results – released in late February – we see a distinct improvement in fundamentals.

All up, the company not only posted stronger top-line growth, but it tightened its losses during the half. H1 revenue more than doubled, surging 144% to NZ$1,714,980; while losses sharply decreased, dropping 47% to NZ$727,944.

In saying that, at a market capitalisation of over $200 million – Zoono (ASX: ZNO) currently trades on a lofty sales multiple – by historical standards.

Looking at where Zoono aims to head next, and speaking of the company’s ‘evolving business’ model, as part of the H1 it was noted that:

'The major focus of the Company in the current [FY20] financial year is the further evolution of its business model, particularly in regard to adding to its network of distributors in key countries and/or regions and building on-line sales.'

Zoono's management finished by saying:

'The ultimate objective is to increase repeat sales at better margins from longer term direct contracts with larger multinational customers.'

As an aside, it’s important to note that any uptick in sales related to the Coronavirus crisis were not factored into Zoono’s H1 results, which covered the half period ending 31 December 2019.

Finally, and in regard to our initial point: the market looks to have decisively voted that Zoono’s exponential share price action was unsustainable: ZNO dropped ~20% at the open today, plunging as low as $1.31 per share within the first 30 minutes of trade.

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.

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