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Revolution Medicines, Inc. (RVMD)
NASDAQ:RVMD
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Revolution Medicines
(NASDAQ:RVMD)
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Rating:59Neutral
Price Target:
$108.00
▲(5.86% Upside)
Action:ReiteratedDate:02/26/26
Overall score reflects a tension between weak current financial performance (zero recent revenue, rapidly widening losses, and heavy cash burn) and stronger forward-looking signals from the earnings call and price trend (late-stage trial momentum, regulatory wins, and ample financing capacity). Valuation is constrained by ongoing losses (negative P/E) and no dividend support.
Positive Factors
Late-stage clinical footprint
A broad Phase III program and >2,500 patients dosed materially de-risks individual assets and diversifies clinical timing. Multiple registrational trials across tumor types create several potential regulatory/catalyst paths and make the franchise less dependent on a single trial outcome.
Strong liquidity and committed capital
A cash balance >$2.0B plus a $2.0B Royalty Pharma commitment provides durable runway to fund registrational trials and commercial build. This reduces near-term dilution risk and gives management flexibility to advance multiple programs and invest in commercialization infrastructure.
Regulatory recognition
Multiple Breakthrough Therapy designations signal regulatory prioritization and may accelerate development/approval timelines. Such formal recognition enhances partner interest and improves the odds of expedited review, a durable structural advantage for clinical-stage oncology programs.
Negative Factors
Rapid cash burn and widening losses
Substantial and accelerating operating losses and negative cash flow materially erode equity and raise ongoing funding needs. Persistent high burn pressures flexibility, increases dilution risk over time, and constrains optionality if clinical setbacks delay approvals or readouts.
No product revenue; collaboration dependence
As a clinical‑stage firm without marketed products, revenue generation is binary and contingent on milestones, approvals and partner economics. Reliance on partnerships and milestone timing makes cash inflows uncertain and prolongs dependence on financing until sustainable product sales exist.
Large planned operating expense ramp
Aggressive expense guidance to support registrational trials and commercial readiness raises fixed costs well before product revenues. If pivotal readouts are delayed or less favorable, the increased cost base magnifies downside, pressuring cash and strategic flexibility over the medium term.
Revolution Medicines (RVMD) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$20.22B
Dividend YieldN/A
Average Volume (3M)2.71M
Price to Earnings (P/E)―
Beta (1Y)1.00
Revenue Growth-100.00%
EPS Growth-44.24%
CountryUS
Employees616
SectorHealthcare
Sector Strength45
IndustryBiotechnology
Share Statistics
EPS (TTM)-1.86
Shares Outstanding198,173,400
10 Day Avg. Volume2,532,124
30 Day Avg. Volume2,713,690
Financial Highlights & Ratios
PEG Ratio-0.20
Price to Book (P/B)9.28
Price to Sales (P/S)0.00
P/FCF Ratio-16.57
Enterprise Value/Market Cap0.96
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit-2.28K
Enterprise Value/Ebitda-17.07
Forecast
1Y Price Target
$141.14Price Target Upside38.35% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering16
EPS Forecast (FY)-7.57
Revenue Forecast (FY)$33.68M
Revolution Medicines Business Overview & Revenue Model
Company DescriptionRevolution 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 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:Feb 25, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 11, 2026
Earnings Call Sentiment Positive
The call conveyed strong clinical and operational momentum: multiple registrational trials, regulatory designations (Breakthrough Therapy and a commissioner priority voucher), promising early clinical data (notably zoldonrasib combination responses), new compounds entering the clinic, and a solid cash position supplemented by a large Royalty Pharma commitment. Offsetting these positives are substantially higher R&D and G&A spending, a materially wider net loss, and elevated 2026 operating expense guidance as the company scales clinical and commercial activities. Clinical uncertainties remain (OS-driven readout timing, potential crossover risk, and difficult CRC biology), but the balance of progress and funding to execute the plan led management to accelerate investments. Overall, progress and available capital appear to outweigh the near-term financial drag from higher expenses.Q4-2025 Updates
Positive Updates
Strong cash position and committed capital
Cash and investments of $2.03 billion at 12/31/2025 and access to up to $2.0 billion in committed capital via the Royalty Pharma agreement (first tranche of $250 million received; $1.75 billion remaining).
Robust late-stage clinical footprint
Eight ongoing or planned Phase III registrational trials across indications (pancreatic cancer, non-small cell lung cancer, colorectal cancer); more than 2,500 patients have received one or more RAS(ON) inhibitors in aggregate.
RASolute 302 enrollment complete; readout timing
Global enrollment for RASolute 302 (second-line metastatic pancreatic cancer) is complete with an anticipated readout in the first half of 2026 (OS event-driven).
Encouraging zoldonrasib first-line pancreatic combination data
Initial data for zoldonrasib + modified FOLFIRINOX in first-line metastatic pancreatic cancer showed a 63% partial response rate (confirmed or pending confirmation) and a disease control rate of 95%; high drug dose intensity maintained and majority of patients remained on treatment.
Regulatory recognition for key assets
Daraxonrasib received U.S. FDA Breakthrough Therapy designation and a commissioner national priority voucher (CMPV); zoldonrasib was awarded Breakthrough Therapy designation (company stated this is the third RAS(ON) inhibitor to receive this distinction).
Pipeline expansion and new clinical entrants
Four clinical-stage RAS(ON) investigational drugs highlighted (daraxonrasib, elironrasib, zoldonrasib, RMC-5127); RMC-5127 (G12V selective) first patient dosed in a first-in-human trial with expected recommended Phase II monotherapy dose in H2 2026. Preclinical RM-055 class showed deep, durable regressions in daraxonrasib-resistant models and the company plans to begin clinical development later in 2026.
Active external collaborations
Clinical collaborations in place with Tango Therapeutics, Bristol-Myers Squibb and Summit Therapeutics (e.g., combos with PRMT5 inhibitors and Ivonescimab PD-1/VEGF bispecific); first patient dosed in Summit combination trial.
Commercial and organizational readiness
Company is building a global commercial organization focused on an initial U.S. launch: key strategic hires, regional field sales leadership onboarded, and active recruitment for the first field sales team.
Negative Updates
Significant increase in R&D spending
Q4 2025 R&D expenses were $294.9 million versus $188.1 million in Q4 2024, an increase of approximately 56.8%, driven by higher clinical trial and manufacturing costs and increased headcount/stock-based compensation.
Large rise in G&A expenses
Q4 2025 G&A expenses were $66.7 million versus $28.2 million in Q4 2024, an increase of approximately 136.6%, primarily due to commercial preparation activities and personnel-related costs.
Widening net loss
Net loss for Q4 2025 was $364.9 million versus $194.6 million in Q4 2024, an increase of approximately 87.5%; Q4 2025 included noncash charges such as $33.7 million stock-based compensation, $12.6 million warrant mark-to-market expense and $11.9 million noncash interest tied to the Royalty Pharma arrangement.
High operating expense guidance for 2026
Company expects full year 2026 GAAP operating expenses between $1.6 billion and $1.7 billion (including estimated noncash stock-based compensation of $180–$200 million), reflecting substantial planned spending to support registrational trials and commercial readiness.
Clinical and regulatory uncertainties around interim readouts
The pivotal RASolute 302 readout is OS event-driven; management noted possible split scenarios (e.g., PFS signal without OS significance at interim), and they declined to provide specific event-rate guidance — introducing uncertainty about interim interpretation and disclosure timing.
Potential trial crossover/commercial impact risk
Management acknowledged the potential for approved second-line use of daraxonrasib to complicate first-line trial results (e.g., crossover or off-label use), which could affect endpoint interpretation in ongoing/future registrational studies.
Challenges in colorectal cancer development
Colorectal cancer (CRC) described as genetically complex and heterogeneous with lower single-agent response rates and a need for combination strategies; this makes rapid decision-making and clear registration paths more difficult compared with other tumor types.
Company Guidance
Revolution Medicines said it is switching forward-looking disclosure from GAAP net loss to GAAP operating expenses and guided full‑year 2026 GAAP operating expenses of $1.6–$1.7 billion (which includes $180–$200 million of estimated non‑cash stock‑based compensation), citing higher spend to support multiple registrational trials and expanded commercial preparation; at year‑end 2025 it reported $2.03 billion in cash and investments and an agreement with Royalty Pharma for up to $2.0 billion in committed capital (first $250 million received in June 2025; $1.75 billion remaining). For Q4 2025 R&D was $294.9 million (vs. $188.1M in Q4 2024), G&A was $66.7 million (vs. $28.2M), and net loss was $364.9 million (vs. $194.6M), which included Q4 non‑cash charges of $33.7M stock‑based compensation, $12.6M warrant expense and $11.9M non‑cash interest; the company also noted >2,500 patients dosed across its RAS(ON) inhibitors and 8 ongoing or planned Phase III registrational trials.Revolution Medicines Financial Statement Overview
Summary
Weak fundamentals: revenue fell to $0 in 2024–2025 and losses expanded sharply (net loss to -$1.131B in 2025) with large and rising cash burn (operating cash flow -$898M in 2025). The balance sheet is a partial offset with low leverage (~$159M debt vs. $1.631B equity), but equity erosion and ongoing funding needs are meaningful risks.Income Statement
Profitability deteriorated sharply: annual net loss widened from -$108M (2020) to -$1.131B (2025), with operating losses also expanding materially (EBIT -$111M to -$1.182B). Revenue is small and volatile, falling to $0 in 2024–2025 after $11.6M in 2023 and $35.4M in 2022, highlighting limited commercial scale and rising expense burden. Strength: earlier periods showed positive gross profit when revenue existed, but the core picture is escalating losses and no meaningful revenue base in the most recent years.18
Very Negative
Balance Sheet
Leverage remains modest, with debt-to-equity generally low (about 0.05–0.11 historically; ~0.10 in 2025) and total debt at $159M against $1.631B of equity in 2025, which supports financial flexibility. However, equity has trended down from $2.265B (2024) to $1.631B (2025), consistent with sustained losses and cash burn, and returns on equity are deeply negative (2025 return on equity about -0.69). Overall: balance sheet is not heavily levered, but the erosion of equity is a key risk if losses persist.62
Positive
Cash Flow
Cash burn is significant and accelerating: operating cash flow declined from -$100M (2020) to -$898M (2025), with free cash flow similarly worsening to -$914M (2025). While free cash flow to net income stays around ~1.0 (cash losses broadly tracking accounting losses), the scale of outflows implies heavy ongoing funding needs. A positive free cash flow growth figure in 2025 (+17.6) contrasts with the larger absolute burn, indicating volatility rather than clear improvement.24
Negative
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 0.00 | 0.00 | 11.58M | 35.38M | 29.39M |
| Gross Profit | -16.56M | 0.00 | 11.58M | 35.38M | 29.39M |
| EBITDA | -1.09B | -677.70M | -477.88M | -248.62M | -179.75M |
| Net Income | -1.13B | -600.09M | -436.37M | -248.71M | -187.09M |
Balance Sheet | |||||
| Total Assets | 2.35B | 2.56B | 2.06B | 811.93M | 737.99M |
| Cash, Cash Equivalents and Short-Term Investments | 2.03B | 2.29B | 1.85B | 644.94M | 577.05M |
| Total Debt | 158.70M | 135.84M | 87.94M | 64.20M | 66.63M |
| Total Liabilities | 723.21M | 293.10M | 235.51M | 126.74M | 135.42M |
| Stockholders Equity | 1.63B | 2.27B | 1.83B | 685.19M | 602.57M |
Cash Flow | |||||
| Free Cash Flow | -913.73M | -567.74M | -358.30M | -235.22M | -153.71M |
| Operating Cash Flow | -897.74M | -557.44M | -350.57M | -224.40M | -147.18M |
| Investing Cash Flow | 118.06M | -554.39M | -342.60M | -24.12M | -142.12M |
| Financing Cash Flow | 621.52M | 959.41M | 1.23B | 301.43M | 294.18M |
Revolution Medicines Technical Analysis
Positive
102.02
Price Trends
98.25
Positive
81.30
Positive
60.43
Positive
Market Momentum
1.07
Negative
52.78
Neutral
54.75
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 102.02 is above the 20-day moving average (MA) of 99.51, above the 50-day MA of 98.25, and above the 200-day MA of 60.43, indicating a bullish trend. The MACD of 1.07 indicates Negative momentum. The RSI at 52.78 is Neutral, neither overbought nor oversold. The STOCH value of 54.75 is Neutral, 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
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $3.83B | 43.97 | 14.79% | ― | 17.92% | -26.13% | |
59 Neutral | $20.22B | ― | -58.07% | ― | -100.00% | -44.24% | |
56 Neutral | $8.92B | -10.86 | -25.59% | ― | ― | -5.21% | |
53 Neutral | $13.54B | -33.23 | -70.72% | ― | 20.39% | 34.00% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
50 Neutral | $3.51B | ― | -22.60% | ― | 74.91% | 31.54% |
* Healthcare Sector Average
RVMD
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101.62
63.28
165.05%
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35.97
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Ionis Pharmaceuticals
81.96
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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.