Veru (VERU -3.15%) rose in popularity in 2022, not due to its core business but the hype and excitement surrounding its COVID-19 drug, sabizabulin. And although the stock has been falling in recent months, that's after it experienced a significant rise in value. Below, I'll look at how much a $1,000 investment in the company back in 2020 would be worth right now and whether Veru, at its beaten-down valuation, is a good buy today.

Would buying the stock in 2020 have paid off?

In January 2020, Veru was coming off a quarter (the period ended Dec. 31, 2019) when it reported a net loss of $3.3 million on revenue of $10.6 million -- an impressive 66% improvement from the previous year. The growth was due to strong prescription sales of FC2, the company's female condom.

Fast-forward to its most recent quarter in 2022, when the situation had deteriorated significantly: Veru's net loss swelled to more than $41 million for the period ending Sept. 30, and revenue was just $2.6 million as management noted that "FC2 revenue decreased this past year due to business challenges experienced by our largest telemedicine customers."

Things have gone off the rails for the company, but that doesn't mean buying in early 2020 would have been a bad move. On Jan. 2, 2020, Veru's stock closed at a price of $3.46. At that rate, a $1,000 investment in the company would have enabled you to own 289 shares of the business. Today, those shares would be worth approximately $1,390, giving you a solid 39% return. If you had sold the stock earlier, your gains could have been even more impressive. But even holding until now, you'd have a market-beating investment on your hands. By comparison, the S&P 500 has risen by just 17% in value over the same stretch.

The stock has come crashing down to reality this year

Between the start of 2020 and now, the stock's overall gains might look reasonable for a high-flying growth stock. But that would ignore the boom and bust period that happened in the meantime. Veru's stock skyrocketed on the hopes of its COVID-19 pill and the crash that happened afterward as investors became more pessimistic about the drug's chances of obtaining Emergency Use Authorization. An advisory committee for the FDA voted against the drug, believing that its benefits didn't outweigh the potential risks.

From a 52-week high of $24.55, shares of Veru are down 80%. COVID stocks have fallen out of favor with investors; despite case numbers rising of late, hope for a treatment or vaccine is no longer enough to drive up a company's value. What's more important is a promising growth story that goes beyond just COVID. Given Veru's uninspiring quarterly results reported in December, it's clear that is lacking for the business today, and it's little surprise that its stock has been struggling.

Is Veru a buy today?

Veru isn't a stock that shows a lot of potential right now. If demand drastically falls for its core product, FC2, that could pose a significant risk to the business. That, combined with negative operating cash flow of $47.5 million over the trailing 12 months, should make investors think long and hard about buying shares of Veru; the stock continues to be under pressure and could fall further as it's still trading at a hefty 10 times revenue. While all hope is not yet lost for the business, this is an ultra-risky investment that investors are likely better off avoiding.