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Revolution Medicines (RVMD)
NASDAQ:RVMD
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Revolution Medicines
(NASDAQ:RVMD)
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Rating:52Neutral
Price Target:―
Revolution Medicines has a moderate overall score primarily due to financial challenges such as declining revenues and persistent net losses, common in biotech firms. The technical analysis indicates a bearish trend, and the valuation remains unattractive with a negative P/E ratio. However, the positive strides in the RAS(ON) inhibitor pipeline and strong liquidity position partially offset these challenges, as highlighted in the recent earnings call.
Positive Factors
Strong Financial Position
A robust cash reserve ensures financial stability and supports long-term R&D activities, providing a buffer against operational uncertainties.
Advancements in RAS(ON) Inhibitor Pipeline
Progress in the RAS(ON) inhibitor pipeline strengthens Revolution Medicines' competitive position in precision oncology, potentially leading to future revenue streams.
Strategic Collaborations
Strategic partnerships enhance drug development capabilities and market reach, fostering innovation and potential revenue through shared resources and expertise.
Negative Factors
Declining Revenue
A consistent decline in revenue indicates challenges in monetizing R&D investments, which could impact long-term financial sustainability and growth potential.
Increased Net Loss
Rising net losses reflect escalating operational costs, which may pressure cash reserves and necessitate additional funding, impacting financial health.
Negative Cash Flow
Persistent negative cash flow highlights difficulties in generating operational cash, potentially limiting investment in R&D and necessitating external financing.
Revolution Medicines (RVMD) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.30B
Dividend YieldN/A
Average Volume (3M)2.14M
Price to Earnings (P/E)―
Beta (1Y)1.30
Revenue Growth-100.00%
EPS Growth-23.49%
CountryUS
Employees616
SectorHealthcare
Sector Strength45
IndustryBiotechnology
Share Statistics
EPS (TTM)-1.31
Shares Outstanding186,933,200
10 Day Avg. Volume2,540,205
30 Day Avg. Volume2,135,858
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap0.59
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit-8.98
Enterprise Value/Ebitda-5.58
Forecast
1Y Price Target
$71.22Price Target Upside63.57% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering16
Revolution Medicines Business Overview & Revenue Model
Company DescriptionRevolution Medicines, Inc. (RVMD) is a biotechnology company that operates in the pharmaceutical sector, focusing on the discovery and development of novel targeted therapies for cancer. The company is particularly known for its precision oncology approach, targeting specific genetic mutations and pathways that drive cancer growth and progression. Revolution Medicines' core products are centered around inhibiting critical signaling pathways, such as the RAS and mTOR pathways, which are implicated in various types of cancers.
How the Company Makes MoneyRevolution Medicines generates revenue primarily through strategic collaborations, research and development partnerships, and milestone payments from other pharmaceutical companies. The company enters into agreements with larger pharmaceutical firms to co-develop and commercialize its drug candidates, often receiving upfront payments, research funding, and future royalties on sales of successfully developed products. Additionally, Revolution Medicines may also benefit from licensing agreements, wherein it grants other companies the rights to use its proprietary technologies or compounds in exchange for licensing fees.
Revolution Medicines Earnings Call Summary
Earnings Call Date:Aug 06, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 05, 2025
Earnings Call Sentiment Positive
The earnings call reflects a generally positive outlook with significant progress in clinical trials and strategic financial partnerships. However, increased expenses and dependency on regulatory approvals present challenges.Q2-2025 Updates
Positive Updates
Breakthrough Therapy Designation for Daraxonrasib
Daraxonrasib received Breakthrough Therapy designation from the FDA for previously treated metastatic pancreatic cancer with KRAS G12 mutations, underscoring the large unmet medical needs for these patients.
Strong Progress in Clinical Trials
Significant progress in enrolling and advancing various clinical trials, including the global Phase III trial RASolute 302 and the upcoming registrational trials for daraxonrasib in first-line metastatic pancreatic cancer and as adjuvant treatment.
Financial Partnership with Royalty Pharma
RevMed has secured a $2 billion partnership with Royalty Pharma, providing flexible capital to support clinical development and commercialization without equity dilution.
Collaborations to Enhance Drug Discovery
Significant collaborations with companies like Aethon and Iambic to enhance discovery efforts through novel bispecific antibodies and AI capabilities.
Negative Updates
Increased R&D and Net Loss
R&D expenses increased to $224.1 million from $134.9 million year-over-year, and net loss rose to $247.8 million from $133.2 million due to higher operating expenses.
Dependency on Regulatory Approvals
Progress and success are heavily dependent on regulatory approvals and successful outcomes from ongoing clinical trials, adding uncertainty to timelines and outcomes.
Company Guidance
During the Revolution Medicines Q2 2025 earnings call, significant guidance was provided on various fronts. For their most advanced clinical program, daraxonrasib, a Phase III trial named RASolute 302 is ongoing, focusing on second-line metastatic pancreatic ductal adenocarcinoma (PDAC), with enrollment expected to complete this year for a 2026 data readout. The company also plans to initiate a first-line metastatic pancreatic cancer trial later this year, comparing daraxonrasib alone or in combination with chemotherapy. Additionally, a separate trial will investigate daraxonrasib as adjuvant therapy for resectable PDAC. In non-small cell lung cancer, the RASolve 301 Phase III trial is underway, and the company plans a registrational trial in 2026, having shown daraxonrasib’s compatibility with pembrolizumab and chemotherapy. The pipeline also includes elironrasib and zoldonrasib, both progressing in trials for RAS G12C and G12D mutations in lung cancer, with elironrasib recently receiving Breakthrough Therapy designation from the FDA. Financially, the company ended the quarter with $2.1 billion in cash, bolstered by a $2 billion partnership with Royalty Pharma, and updated their 2025 guidance to project a GAAP net loss between $1.03 billion and $1.09 billion.Revolution Medicines Financial Statement Overview
Summary
Revolution Medicines faces significant financial challenges with declining revenues and persistent losses, common in the biotechnology industry due to high R&D costs and long product development cycles. While the balance sheet reflects strong liquidity and low leverage, the cash flow statement highlights the need for efficient cash management to sustain operations.Income Statement
Revolution Medicines shows a declining revenue trend over the past five years, with a significant drop to zero revenue in the most recent year. Margins, including gross profit and net income, are negative, reflecting substantial losses and indicating challenges in achieving profitability.45
Neutral
Balance Sheet
The company has maintained a strong cash position with negative net debt, suggesting adequate liquidity. However, the consistent high levels of net losses are concerning. The debt-to-equity ratio remains low, indicating conservative leverage, which is positive for financial stability.60
Neutral
Cash Flow
Cash flows remain negative with increasing operating and free cash flow deficits, suggesting ongoing challenges in generating positive cash flow from operations. However, substantial financing activities have bolstered cash reserves, which can support operations in the short term.50
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 0.00 | 0.00 | 11.58M | 35.38M | 29.39M | 42.98M |
| Gross Profit | -549.40M | -592.23M | -399.66M | -217.69M | -157.56M | -89.27M |
| EBITDA | -883.71M | -589.02M | -456.68M | -248.62M | -179.75M | -101.91M |
| Net Income | -812.06M | -600.09M | -436.37M | -248.71M | -187.09M | -108.16M |
Balance Sheet | ||||||
| Total Assets | 2.43B | 2.56B | 2.06B | 811.93M | 737.99M | 567.40M |
| Cash, Cash Equivalents and Short-Term Investments | 2.14B | 2.29B | 1.85B | 644.94M | 577.05M | 440.74M |
| Total Debt | 132.79M | 135.84M | 87.94M | 64.20M | 66.63M | 32.66M |
| Total Liabilities | 564.20M | 293.10M | 235.51M | 126.74M | 135.42M | 92.72M |
| Stockholders Equity | 1.87B | 2.27B | 1.83B | 685.19M | 602.57M | 474.68M |
Cash Flow | ||||||
| Free Cash Flow | -700.36M | -567.74M | -358.30M | -235.22M | -153.71M | -103.00M |
| Operating Cash Flow | -684.90M | -557.44M | -350.57M | -224.40M | -147.18M | -100.06M |
| Investing Cash Flow | -396.05M | -554.39M | -342.60M | -24.12M | -142.12M | -234.23M |
| Financing Cash Flow | 1.21B | 959.41M | 1.23B | 301.43M | 294.18M | 422.78M |
Revolution Medicines Technical Analysis
Positive
43.54
Price Trends
39.09
Positive
39.14
Positive
39.75
Positive
Market Momentum
1.55
Positive
53.27
Neutral
17.70
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RVMD, the sentiment is Positive. The current price of 43.54 is above the 20-day moving average (MA) of 42.42, above the 50-day MA of 39.09, and above the 200-day MA of 39.75, indicating a bullish trend. The MACD of 1.55 indicates Positive momentum. The RSI at 53.27 is Neutral, neither overbought nor oversold. The STOCH value of 17.70 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RVMD.
Revolution Medicines Risk Analysis
Revolution Medicines disclosed 83 risk factors in its most recent earnings report. Revolution Medicines reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Revolution Medicines Peers Comparison
Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | 9.83B | 30.75 | 16.00% | 0.15% | 17.71% | 41.83% | |
73 Outperform | 5.45B | 29.02 | 1.63% | 1.16% | 1.11% | -23.73% | |
61 Neutral | 10.04B | -21.41 | -11.29% | ― | -85.32% | -111.82% | |
58 Neutral | 9.68B | -11.97 | 43.43% | ― | 7.62% | -55.29% | |
52 Neutral | $8.30B | ― | -46.61% | ― | -100.00% | -23.49% | |
50 Neutral | 8.37B | -52.60 | -45.52% | ― | 99.19% | 48.43% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
Performance Comparison
RVMD
Revolution Medicines
42.51
-1.66
-3.76%
CORT
Corcept Therapeutics
82.73
38.80
88.32%
IONS
Ionis Pharmaceuticals
63.94
23.09
56.52%
BPMC
Blueprint Medicines
129.46
36.91
39.88%
LEGN
Legend Biotech
32.82
-16.45
-33.39%
PCVX
Vaxcyte
32.82
-80.32
-70.99%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.