Yahoo Finance The Cue Biopharma (NASDAQ:CUE) Share Price Has Gained 191%, So Why Not Pay It Some Attention?
The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But if you pick the right business to buy shares in, you can make more than you can lose. For example, the Cue Biopharma, Inc. (NASDAQ:CUE) share price has soared 191% return in just a single year. On top of that, the share price is up 63% in about a quarter. Note that businesses generally develop over the long term, so the returns over the last year might not reflect a long term trend.
View our latest analysis for Cue Biopharma
With just US$2,739,604 worth of revenue in twelve months, we don't think the market considers Cue Biopharma to have proven its business plan. As a result, we think it's unlikely shareholders are paying much attention to current revenue, but rather speculating on growth in the years to come. It seems likely some shareholders believe that Cue Biopharma has the funding to invent a new product before too long.
As a general rule, if a company doesn't have much revenue, and it loses money, then it is a high risk investment. There is usually a significant chance that they will need more money for business development, putting them at the mercy of capital markets. So the share price itself impacts the value of the shares (as it determines the cost of capital). While some such companies do very well over the long term, others become hyped up by promoters before eventually falling back down to earth, and going bankrupt (or being recapitalized). Cue Biopharma has already given some investors a taste of the sweet gains that high risk investing can generate, if your timing is right.
When it reported in September 2019 Cue Biopharma had minimal cash in excess of all liabilities consider its expenditure: just US$13m to be specific. So if it hasn't remedied the situation already, it will almost certainly have to raise more capital soon. Given how low on cash the it got, investors must really like its potential for the share price to be up 75% in the last year . You can see in the image below, how Cue Biopharma's cash levels have changed over time (click to see the values). The image below shows how Cue Biopharma's balance sheet has changed over time; if you want to see the precise values, simply click on the image.
In reality it's hard to have much certainty when valuing a business that has neither revenue or profit. One thing you can do is check if company insiders are buying shares. It's usually a positive if they have, as it may indicate they see value in the stock. Luckily we are in a position to provide you with this free chart of insider buying (and selling).
A Different Perspective
Cue Biopharma shareholders should be happy with the total gain of 191% over the last twelve months. A substantial portion of that gain has come in the last three months, with the stock up 63% in that time. Demand for the stock from multiple parties is pushing the price higher; it could be that word is getting out about its virtues as a business. It's always interesting to track share price performance over the longer term. But to understand Cue Biopharma better, we need to consider many other factors. Even so, be aware that Cue Biopharma is showing 6 warning signs in our investment analysis , and 2 of those are a bit unpleasant...
Cue Biopharma is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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