Revolution Medicines (RVMD) AI Stock Analysis

• Market Cap: $7.57B
• Dividend Yield: N/A
• Average Volume (3M): 1.96M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.33
• Revenue Growth: -100.00%
• EPS Growth: 5.49%
• Country: US
• Employees: 534
• Sector: Healthcare
• Sector Strength: 57
• Industry: Biotechnology
• EPS (TTM): -3.57
• Shares Outstanding: 185,913,330
• 10 Day Avg. Volume: 1,901,401
• 30 Day Avg. Volume: 1,957,251
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.81
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $69.00
• Price Target Upside: 69.45% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 11

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

Clinical Trials

Zoldonrasib impresses at AACR with a 61% ORR in treated patients.

Pipeline and Development

Encouraging clinical data from the innovative RAS(ON) platform, coupled with the large addressable population of RAS-dependent cancers, support a positive long-term outlook for RVMD.

Safety Profile

Only 2% of patients treated with zoldonrasib experienced a G3 TRAE, with no G4-5 TRAEs, indicating a favorable safety profile.

Negative Factors

Financial Performance

RVMD reported a net loss of $194.5M, or ($1.12)/share, higher than expected due to more than expected operating expenses.

Treatment Challenges

There were slightly higher percentages of dose interruptions and one patient discontinued treatment, reflecting minor challenges in treatment continuation.

Revolution Medicines Business Overview & Revenue Model

Company Description

Revolution Medicines, Inc., a clinical-stage precision oncology company, focuses on developing therapies to inhibit frontier targets in RAS-addicted cancers. The company is developing RMC-4630, an inhibitor of SHP2, which is in Phase 1/2 clinical trial for the treatment of solid tumors, such as gynecologic and colorectal cancer tumors. It also develops RMC-5845, a selective inhibitor of SOS1, a protein that converts RAS (OFF) to RAS (ON) in cells; and RMC-5552, a hyperactivated selective inhibitor of mTORC1 signaling in tumors. In addition, the company is developing RMC-6291, a mutant-selective inhibitor of KRASG12C(ON) and NRASG12C(ON); and RMC-6236, a RAS-selective inhibitor of multiple RAS(ON) variants. Further, it develops RAS(ON) Inhibitors targeting KRASG13C(ON) and KRASG12D(ON). The company has a collaboration agreement with Sanofi for the research and development of SHP2 inhibitors, including RMC-4630. Revolution Medicines, Inc. was incorporated in 2014 and is headquartered in Redwood City, California.

How the Company Makes Money

Revolution 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 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.

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.

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.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
0.00	11.58M	35.38M	29.39M	42.98M
	Gross Profit
0.00	11.58M	25.72M	22.06M	-89.27M
	EBIT
-689.52M	-487.19M	-258.28M	-188.01M	-110.70M
	EBITDA
-689.52M	-430.58M	-239.47M	-179.75M	-101.91M
	Net Income Common Stockholders
-600.09M	-436.37M	-248.71M	-179.77M	-108.16M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.29B	1.85B	644.94M	577.05M	440.74M
	Total Assets
2.56B	2.06B	811.93M	737.99M	567.40M
	Total Debt
135.84M	87.94M	64.20M	66.63M	32.66M
	Net Debt
-407.22M	-608.20M	-97.21M	-41.86M	-71.60M
	Total Liabilities
293.10M	235.51M	126.74M	135.42M	92.72M
	Stockholders Equity
2.27B	1.83B	685.19M	602.57M	474.68M
Cash Flow		Free Cash Flow
-567.74M	-358.30M	-235.22M	-153.71M	-103.00M
	Operating Cash Flow
-557.44M	-350.57M	-224.40M	-147.18M	-100.06M
	Investing Cash Flow
-554.39M	-342.60M	-24.12M	-142.12M	-234.23M
	Financing Cash Flow
959.41M	1.23B	301.43M	294.18M	422.78M

Revolution Medicines Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 40.72
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 40.72 is above the 20-day moving average (MA) of 36.81, above the 50-day MA of 37.76, and below the 200-day MA of 44.16, indicating a neutral trend. The MACD of 1.04 indicates Negative momentum. The RSI at 63.09 is Neutral, neither overbought nor oversold. The STOCH value of 76.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RVMD.

Revolution Medicines Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ENSG	78 Outperform	$7.61B	24.86	17.66%	0.18%	16.80%	39.99%
TFX	58 Neutral	$5.80B	87.79	3.48%	1.08%	0.29%	-48.98%
BBIO	57 Neutral	$7.32B	―	35.68%	―	-41.71%	-9.37%
RVMD	52 Neutral	$7.57B	―	-29.33%	―	-100.00%	5.49%
Sector *	52 Neutral	$5.35B	3.96	-42.60%	2.86%	17.58%	1.27%
ROIV	51 Neutral	$8.19B	1.93	-7.10%	―	-20.84%	-102.48%
BPMC	48 Neutral	$5.17B	―	-47.71%	―	99.19%	48.43%