Yahoo Finance Viridian Therapeutics (NASDAQ:VRDN) delivers shareholders solid 105% return over 1 year, surging 4.6% in the last week alone
The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. On the other hand, if you find a high quality business to buy (at the right price) you can more than double your money! Take, for example Viridian Therapeutics, Inc. (NASDAQ:VRDN). Its share price is already up an impressive 105% in the last twelve months. On top of that, the share price is up 88% in about a quarter. It is also impressive that the stock is up 43% over three years, adding to the sense that it is a real winner.
The past week has proven to be lucrative for Viridian Therapeutics investors, so let's see if fundamentals drove the company's one-year performance.
See our latest analysis for Viridian Therapeutics
We don't think Viridian Therapeutics' revenue of US$1,881,000 is enough to establish significant demand. So it seems shareholders are too busy dreaming about the progress to come than dwelling on the current (lack of) revenue. For example, they may be hoping that Viridian Therapeutics comes up with a great new product, before it runs out of money.
We think companies that have neither significant revenues nor profits are pretty high risk. There is almost always a chance they will need to raise more capital, and their progress - and share price - will dictate how dilutive that is to current holders. While some such companies go on to make revenue, profits, and generate value, others get hyped up by hopeful naifs before eventually going bankrupt. Of course, if you time it right, high risk investments like this can really pay off, as Viridian Therapeutics investors might know.
Viridian Therapeutics has plenty of cash in the bank, with cash in excess of all liabilities sitting at US$400m, when it last reported (September 2022). That allows management to focus on growing the business, and not worry too much about raising capital. And given that the share price has shot up 98% in the last year , it's fair to say investors are liking management's vision for the future. You can click on the image below to see (in greater detail) how Viridian Therapeutics' cash levels have changed over time.
In reality it's hard to have much certainty when valuing a business that has neither revenue or profit. However you can take a look at whether insiders have been buying up shares. If they are buying a significant amount of shares, that's certainly a good thing. Luckily we are in a position to provide you with this free chart of insider buying (and selling).
A Different Perspective
It's good to see that Viridian Therapeutics has rewarded shareholders with a total shareholder return of 105% in the last twelve months. Notably the five-year annualised TSR loss of 11% per year compares very unfavourably with the recent share price performance. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For instance, we've identified 3 warning signs for Viridian Therapeutics (1 can't be ignored) that you should be aware of.
But note: Viridian Therapeutics may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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