I have written two articles about Ocugen (NASDAQ:OCGN) in the past and I must say that if I had to summarize OCGN stock in two words, they would be irrational exuberance.

As of August 9, 2021, the company has a market valuation of $1.61 billion with zero revenue for 2019 and 2018.

Yahoo! Finance shows OCGN with a price-to-sales ratio of 27,440 as of June 30. How can a company with almost zero revenue have a market capitalization of 27,000 times its revenue? This is insane.

The Key Points Against the Absurd Price and Valuation of OCGN Stock

In my March 2021 article titled “The Excitement Around Ocugen Is Irrational” I analyzed the following key points:

• OCGN Stock: Another Coronavirus Vaccine News Story
• Ocugen Has Come to a Hot Business Too Late
• Ocugen Fundamentals: No Sales, No Profits

My financial analysis noted, “The company has a market capitalization of $1.88 billion. And for the three consecutive years of 2019, 2018, and 2017, it has zero revenue. Operating income and net income are both negative for all three years.” I wrote that, “the fundamentals are very poor. For a company with no revenue to have this market capitalization is insane.”

And my verdict was, “Not all biotech stocks are the same. Yes, most of them are risky. But OCGN stock is not just too risky, it is insanely overpriced. No second thoughts on that.”

My second article about OCGN stock, titled “Ocugen Stock: The Two What-If Scenarios To Consider” was about the two main scenarios about the future of the company related to their vaccine candidate for Covid-19. My main highlights were:

• Why Joining a Party too Late Most Probably is Not a Good Idea
• Bottom line: OCGN Stock May Surge or May Tank

I wrote, “The second part of this scenario, and the worst of all for OCGN stock, is that the vaccine may never get FDA approval. In this case, the stock most probably will probably go into freefall. With such risk and expected volatility, it is advisable to stay away for now.”

So what’s the latest news to consider with Ocugen?

Business News

Two press releases have positive developments, one being about the efficacy of Ocugen’s vaccine, with the other being about Ocugen submitting their vaccine for approval in Canada.

In the first press release, it was reported that, “Efficacy analysis demonstrates COVAXIN™ to be 93.4% protective against severe symptomatic COVID-19” and that “Efficacy data demonstrates 65.2% protection against the SARS-CoV-2, B.1.617.2 Delta variant.”

In the second press release, Ocugen announced it’s submission of its vaccine to the Canadian market for approval.

Both of these press releases are good news for my scenario on if and when Ocugen’s Covaxin vaccine, which it’s co-developing with Bharat Biotech International, would find foot in the market. Despite the good news, it lacks the element of certainty. The efficacy is significant, but again it has to be approved for use first. We don’t know what the outcome of the review will be. And even if it is a positive one, the margins for delivering high numbers of Covaxin doses seem to be narrow as larger agreements and contracts with other more reputable pharmaceutical companies are already in place in the U.S. and Europe.

OGCN Stock Price Performance: Another Important Investing Lesson

When I look at Marketwatch, Ocugen’s stock price is something I almost can’t comprehend. The stock is up about 306% in 2021 and 1,092% in the past 12 months. Why? Did the company report great financial results? Is it a leader in its sector? Did it return any generous dividend to its shareholders? Did it make any stock repurchases?

The answer is: no. It didn’t accomplish any of those.

Out of five analysts, two of them have a buy recommendation, and three out of them a hold recommendation. On what positive developments are these recommendations based?

Financials: A Sad Story, but A Revealing One

Ocugen recently released second-quarter 2021 financial results. It provided a few key details to follow that could clue us into it’s valuation:

• “Ocugen’s cash, cash equivalents, and restricted cash totaled $115.8 million as of June 30, 2021, compared to $24.2 million as of December 31, 2020. Ocugen had 198.7 million shares of common stock outstanding as of June 30, 2021.”
• “Research and development expenses for the three months ended June 30, 2021, were $18.9 million compared to $1.6 million for the three months ended June 30, 2020. Research and development expenses for the three months ended June 30, 2021, included a $15.0 million up-front payment to Bharat Biotech for the right and license to COVAXIN™ development, manufacturing, and commercialization in Canada. General and administrative expenses for the three months ended June 30, 2021, were $6.8 million compared to $1.8 million for the three months ended June 30, 2020. Ocugen reported a $0.13 net loss per share for the three months ended June 30, 2021, compared to a $0.19 net loss per share for the three months ended June 30, 2020.”

The company has plenty of cash, but it matters what it will do with it. According to Morningstar, Ocugen has a long history of burning cash, with a negative free cash flow figure since 2012. Operating income and net income have also both been negative since 2012.

Finally, another important figure of valuation, OCGN stock’s book value per share shrunk to $0.08 per share in 2020 and is $0.59 per share for the trailing twelve months.

My final verdict on OCGN stock: I cannot say buy. Instead, my first thought is bye.

On the date of publication, Stavros Georgiadis, CFA  did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Stavros Georgiadis is a CFA charter holder, an Equity Research Analyst, and an Economist. He focuses on U.S. stocks and has his own stock market blog at thestockmarketontheinternet.com/. He has written in the past various articles for other publications and can be reached on Twitter and on LinkedIn.