The excitement surrounding Viking Therapeutics (VKTX 3.49%) stock has been dying down significantly lately. In six months, the stock has lost more than 40% of its value. Many investors may have been hoping that another, larger healthcare company would acquire it for its promising GLP-1 treatment, VK2735 -- but that doesn't appear to be happening.

And with a growing number of companies in the GLP-1 space, investors may be losing interest in the stock. Could Viking's rapidly declining valuation be a sign that the bubble has burst for it, given its inflated price, or is the healthcare stock due for a big rally this year?

Viking's GLP-1 drug is promising, but it's not a sure thing

Shares of Viking soared early last year after the company posted encouraging data for VK2735 from a phase 2 clinical trial, which showed that the injectable drug helped people lose close to 15% of their body weight after a period of just 13 weeks. The company is also working on an oral version, which is not as far along.

Investors have been quick to jump on the potential for Viking to cash in from the success of VK2735. Having a top GLP-1 drug would be a surefire way for the company to generate billions in revenue.

However, while the early results are promising, investors should remember that VK2735 still needs to show strong results in phase 3 trials before it has a chance of obtaining approval from the Food and Drug Administration. The company is planning to start those trials in the first half of this year -- and investors could still be waiting a while not only for the trial to finish but also for the drug to obtain approval, which is by no means a sure thing.

The company's future remains a big question mark

Investors may be growing concerned with the potentially long road ahead, given that no bids seem to be forthcoming for Viking's business. If that's the case, the company may need to fund its own development and commercialization of the drug (assuming it obtains approval).

Viking doesn't have a source of consistent revenue growth to rely on, which means that it's going to continually burn through cash along the way. For investors, that means share offerings are a high probability, especially as Viking's drugs progress into larger and more expensive trials. The company's share count has been rising over the years, and this is a trend that may continue for the foreseeable future.

VKTX Shares Outstanding data by YCharts

More shares entering the market can put downward pressure on the stock. The one thing that can certainly help offset that is if Viking releases positive trial data, particularly relating to VK2735.

This effectively leaves investors betting on whether the drug will be successful. If it is, the stock could easily soar to more than twice its value. But if it falls short of expectations, then more of a sell-off could ensue.

Is Viking's stock worth taking a chance on today?

Shares of Viking Therapeutics has fallen heavily in value in recent months, but at $3.5 billion, the company's market capitalization remains high for a business with no approved products to date. The danger is that there can still be a lot of downside risk at Viking's current valuation, even though the stock is trading at a much lower price tag. While the bubble may not have completely burst, investors should tread carefully with the stock.

If you have a high risk tolerance, this may be an investment worth considering, but you will need to brace for the possibility of a bumpy road ahead. If you don't fall into that category, however, the good news is that there are plenty of other good growth stocks to consider instead of Viking that come with much less risk.