Shareholders might be concerned that the Checkpoint Therapeutics, Inc. (NASDAQ: CKPT) share price down 14% last month. In contrast, over the past twelve months, the stock has generated some pretty impressive returns. We are very happy to report that the share price has climbed 141% during this time. It is therefore important to see the recent price reduction through this lens. Investors should consider whether the company itself has the fundamental value required to continue to generate earnings.
We do not believe Checkpoint Therapeutics’ sales of $ 1,069,000 is sufficient to establish significant demand. So it appears that investors have focused more on what could be, than paying attention to current income (or lack thereof). For example, they can hope that Checkpoint Therapeutics comes up with a great new product, before it runs out of money.
Businesses that lack both significant revenue and profit are generally considered high risk. You should be aware that there is always a chance that this type of business will need to issue more shares to raise funds in order to continue with their business plan. While some of these companies continue to generate income, profit and value, others are turned on by hopeful naïve before they end up going bankrupt. Checkpoint Therapeutics has already given some investors a taste of the gains that high risk investing can generate, if your timing is right.
When its balance sheet was last published in December 2020, Checkpoint Therapeutics had cash in excess of all liabilities by US $ 34 million. That’s not too bad, but management may need to think about raising capital or going into debt, unless the business is close to breaking even. Given that the stock price has risen 87% in the past year, it’s fair to say that investors remain excited about the future, despite the potential need for cash. The image below shows how Checkpoint Therapeutics’ track record has evolved over time; if you want to see the precise values, just click on the picture.
In reality, it is difficult to have much certainty when evaluating a business that has no income or profits. One thing you can do is check to see if company insiders are buying shares. If they are buying a significant amount of stocks, that is certainly a good thing. You can click here to see if there are any insiders buying.
A different perspective
Fortunately, the total return to shareholders of Checkpoint Therapeutics last year was 141%. What is absolutely clear is that this is far better than the dismal 10% annual average loss suffered in the past three years. It may well be that the company has recovered, or that it has regained investor confidence. It is always interesting to follow the evolution of stock prices over the long term. But to better understand Checkpoint Therapeutics, there are many other factors that we need to consider. Concrete example: we have spotted 5 warning signs for Checkpoint Therapeutics you must be aware.
But beware : Checkpoint Therapeutics May Not Be The Best Stock To Buy. So take a look at this free list of interesting companies with past earnings growth (and new growth forecasts).
Please note that the market returns quoted in this article reflect the market-weighted average returns of stocks currently traded on US stock exchanges.
If you decide to trade Checkpoint Therapeutics, use the cheapest platform * which is ranked # 1 overall by Barron’s, Interactive brokers. Trade stocks, options, futures, currencies, bonds and funds in 135 markets, all from one integrated account. Promoted
This Simply Wall St article is general in nature. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.
*Interactive Brokers Ranked Least Expensive Broker By StockBrokers.com Online Annual Review 2020
Do you have any feedback on this item? Are you worried about the content? Get in touch with us directly. You can also send an email to the editorial team (at) simplywallst.com.