Messaging apps have only risen in popularity in recent times and investors who might be looking into fresh opportunities in this sector could consider taking a look at the DatChat Inc (NASDAQ:DATS) stock.

Although it is a small player in the privacy focussed messaging space at this point, it should be noted that DatChat went public earlier this year on August 12, and in recent days, the stock has been a strong performer. The DatChat stock has managed to deliver gains of as much as 43% over the course of the past week and it might be the right time for investors to take a closer look.

The company had been established back in 2014 and at this point in time, it only caters to 22572 users. That is a minuscule figure when it comes to messaging apps and nowhere near the numbers generated by its competitors.

While that may be the case, the company’s stock has performed strongly and has gone up fourfold since its IPO. The rally in the stock may have been strong but experts believe that those gains may not be actually sustainable. The company has not monetised its customers and hence, it is perhaps not surprising that since its launch in 2014 it has not generated any revenues at all.

As a matter of fact, many investors might in fact wonder about the reasons why the company actually went public considering the fact that in its last reported quarter DatChat suffered a loss of as much as $996,771.

However, the company has argued that it is in need of more capital in order to implement its plans and also to operate the whole thing smoothly. It has been suggested that DatChat is currently looking to add more features to its app and that is a major part of the current business plan that has been put in place. However, the current valuation of the company is pegged at a north of $250 million and experts believe that it is overvalued. Hence, it might be a good idea for investors to tread a bit carefully.