Announcing: Leap Therapeutics (NASDAQ:LPTX) Stock Increased An Energizing 127% In The Last Year

Unfortunately, investing is risky - companies can and do go bankrupt. But if you pick the right stock, you can make a lot more than 100%. Take, for example Leap Therapeutics, Inc. (NASDAQ:LPTX). Its share price is already up an impressive 127% in the last twelve months. In more good news, the share price has risen 26% in thirty days. In contrast, the longer term returns are negative, since the share price is 62% lower than it was three years ago.

Check out our latest analysis for Leap Therapeutics

We don't think Leap Therapeutics' revenue of US$1,125,000 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 Leap 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. You should be aware that there is always a chance that this sort of company will need to issue more shares to raise money to continue pursuing its business plan. 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 Leap Therapeutics investors might know.

When it last reported its balance sheet in September 2020, Leap Therapeutics had cash in excess of all liabilities of US$51m. That's not too bad but management may have to think about raising capital or taking on debt, unless the company is close to breaking even. With the share price up 91% in the last year , the market is seems hopeful about the potential, despite the cash burn. You can click on the image below to see (in greater detail) how Leap Therapeutics' cash levels have changed over time.

Of course, the truth is that it is hard to value companies without much revenue or profit. One thing you can do is check if company insiders are buying shares. It's often positive if so, assuming the buying is sustained and meaningful. Luckily we are in a position to provide you with this free chart of insider buying (and selling).

A Different Perspective

Pleasingly, Leap Therapeutics' total shareholder return last year was 127%. What is absolutely clear is that is far preferable to the dismal 18% average annual loss suffered over the last three years. We're generally cautious about putting too much weigh on shorter term data, but the recent improvement is definitely a positive. It's always interesting to track share price performance over the longer term. But to understand Leap Therapeutics better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 5 warning signs for Leap Therapeutics (of which 2 are a bit concerning!) you should know about.

Of course Leap Therapeutics may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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. 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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