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Recursion Pharmaceuticals (RXRX)
NASDAQ:RXRX
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Recursion Pharmaceuticals
(NASDAQ:RXRX)
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Rating:53Neutral
Price Target:
$3.50
▼(-7.16% Downside)
Action:ReiteratedDate:02/25/26
The score is held back primarily by weak financial performance (large losses and heavy cash burn) and bearish technicals (below key moving averages with negative MACD). Offsetting these, the latest earnings call was constructive with extended runway, cost discipline, and partner validation, which supports a mid-range overall score despite execution and milestone-dependence risks.
Positive Factors
Platform discovery efficiency
Recursion’s platform materially reduces experimental load and halves target‑to‑candidate timelines versus industry norms. Persistent throughput and design-cycle advantages create a durable competitive edge in early discovery, enabling more programs per R&D dollar and faster de‑risking of assets over the next 2–6 months and beyond.
Partner validation & inflows
Substantial, repeatable partner payments from Sanofi, Roche/Genentech show external validation of the AI platform and provide non‑dilutive funding. Durable partner relationships reduce single‑party dependency, supply milestone cadence, and help finance further discovery and clinical work over multiple years.
Supportive cash runway & cost discipline
A sizable cash balance combined with material, sustained operating expense reductions extends runway and lowers near‑term refinancing urgency. This enhances strategic optionality for advancing selected programs and negotiating partnership terms, improving medium‑term execution resilience.
Negative Factors
Persistent cash burn
Large and recurring negative operating and free cash flow show the business still consumes substantial cash despite revenue gains. Unless partner inflows or efficiencies scale further, continued high burn constrains long‑term flexibility, raising financing risk and potential dilution within a 2–6 month horizon.
Widening net losses
Escalating absolute losses despite accelerating revenue indicate operating costs and development spend still far exceed commercial receipts. Persistent negative margins limit self‑funding potential and increase reliance on partners or capital markets, stressing returns on equity and long‑term profitability prospects.
Program early‑stage & milestone reliance
Critical near‑term financing and development pacing are tied to uncertain binary R&D milestones and partner payments. High early‑stage failure probabilities mean missed milestones could rapidly erode runway and force financing or program cuts, concentrating execution risk across the portfolio.
Recursion Pharmaceuticals (RXRX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.84B
Dividend YieldN/A
Average Volume (3M)20.13M
Price to Earnings (P/E)―
Beta (1Y)3.44
Revenue Growth-32.98%
EPS Growth-18.46%
CountryUS
Employees800
SectorHealthcare
Sector Strength45
IndustryBiotechnology
Share Statistics
EPS (TTM)-0.21
Shares Outstanding514,190,250
10 Day Avg. Volume18,002,944
30 Day Avg. Volume20,125,272
Financial Highlights & Ratios
PEG Ratio0.19
Price to Book (P/B)1.62
Price to Sales (P/S)24.50
P/FCF Ratio-4.84
Enterprise Value/Market Cap0.46
Enterprise Value/Revenue11.34
Enterprise Value/Gross Profit226.86
Enterprise Value/Ebitda-1.46
Forecast
1Y Price Target
$7.50Price Target Upside98.94% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
EPS Forecast (FY)-1.14
Revenue Forecast (FY)$82.70M
Recursion Pharmaceuticals Business Overview & Revenue Model
Company DescriptionRecursion Pharmaceuticals, Inc. operates as a clinical-stage biotechnology company, engages in the decoding biology by integrating technological innovations across biology, chemistry, automation, data science, and engineering to industrialize drug discovery. The company develops REC-994, which is in Phase IIa clinical trial to treat cerebral cavernous malformation; REC-2282 for the treatment of neurofibromatosis type 2; REC-4881 to treat familial adenomatous polyposis; and REC-3599, which is in Phase I clinical trial to treat GM2 gangliosidosis. Its preclinical stage product includes REC-3964 to treat Clostridium difficile colitis; REC-64917 for the treat of neural or systemic inflammation; REC-65029 to treat HRD-negative ovarian cancer; REC-648918 to enhance anti-tumor immune; REC-2029 for the treatment of wnt-mutant hepatocellular carcinoma; REC-14221 to treat solid and hematological malignancies; and REC-64151 for the treatment of immune checkpoint resistance in KRAS/STK11 mutant non-small cell lung cancer. The company has collaboration and agreement with Bayer AG; the University of Utah Research Foundation; Ohio State Innovation Foundation; Chromaderm, Inc.; and Takeda Pharmaceutical Company Limited. Recursion Pharmaceuticals, Inc. was incorporated in 2013 and is headquartered in Salt Lake City, Utah.
How the Company Makes MoneyRecursion Pharmaceuticals generates revenue primarily through collaborations and partnerships with pharmaceutical companies and research institutions, wherein it licenses its technology and shares the resulting drug development costs and potential profits. Additionally, the company may receive milestone payments and royalties based on the commercial success of products developed through these partnerships. Recursion also invests in its own drug candidates, aiming to bring novel therapies to market, which can generate revenue through sales once these products are approved by regulatory agencies.
Recursion Pharmaceuticals Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks down revenue by different business units or product lines, highlighting which areas are driving growth and which may need strategic adjustments. This insight helps assess the company's diversification and dependency on specific segments.
Breaks down revenue by different business units or product lines, highlighting which areas are driving growth and which may need strategic adjustments. This insight helps assess the company's diversification and dependency on specific segments.
Data provided by:
The Fly
The FlyRecursion Pharmaceuticals 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 emphasized meaningful progress across clinical proof-of-concept (notably REC-4881 in FAP), strong platform and discovery efficiency metrics, and material partnership inflows that collectively extend runway and validate the AI-enabled strategy. Offsetting these positives are concentration of important catalysts in the near term, industry-wide high failure probabilities, outstanding clinical validation needs for tolerability claims, and reliance on future partner milestones to sustain funding beyond early 2028. On balance, the highlights (clinical proof of concept, cash runway extension, 35% cost reduction, platform scale, and repeatable partner milestones) meaningfully outweigh the program and funding risks cited, supporting an overall positive tone while acknowledging near-term binary execution risks.Q4-2025 Updates
Positive Updates
First AI-enabled clinical proof of concept (REC-4881) in FAP
Phase 2 showed a 43% median polyp burden reduction at 4 mg QD with 75% of patients responding; durable responses observed after a three-month off-treatment period. FDA engagement on registrational pathway on track for 2026 and 18+ cohort enrollment underway.
Material partnership cash inflows and Sanofi milestone progress
Recorded over $500 million in cumulative partner upfronts and milestones to date. Sanofi collaboration delivered $100M upfront plus ~$34M in milestones accepted (total ~$134M); each small-molecule program carries potential >$300M in milestones plus tiered royalties (some up to double digits).
Extended cash runway and year-end cash balance
Year-end cash of $754 million and updated guidance extending runway to early 2028; 2026 cash operating expense guidance expected under $390 million (non-GAAP cash measure).
Significant operating expense efficiency
Achieved a 35% pro forma reduction in operating expenses year-over-year (2024 to 2025) and delivered results ~10% below prior guidance, attributed to portfolio focus, G&A optimization, and platform efficiency gains.
Chemistry and discovery throughput improvements
Synthesizing ~90% fewer compounds versus industry benchmarks (about 300–330 compounds versus ~2,500), shortening target-to-advanced-candidate timelines to ~17 months versus ~40+ months industry average (2x faster). Generated >100 million molecules in silico and produced over 10 internal development candidates.
Rapid design cycles and PI3K preclinical performance
Designed 242 compounds across 13 cycles in 10 months for the PI3K H1047 mutant-selective program; preclinical data showed dose-dependent tumor regression comparable or superior to competitors and no hyperglycemia/metabolic signals in naïve and obese diabetic animal models; IND-enabling studies ongoing with go/no-go decision in H2 2026.
Platform scale and clinical operations impact
Platform has >50 petabytes of multimodal data and 300M+ real-world lives integrated; clinical development AI platform improved enrollment rates by ~1.3x–1.6x and can accelerate study starts by up to three months through precision site/patient heat maps.
Repeatable discovery signal with Sanofi and Roche Genentech collaborations
Five lead packages delivered/accepted by Sanofi so far, illustrating repeatability; two biology maps with Roche Genentech accepted and being translated into new programs.
Negative Updates
High program early-stage risk and binary upcoming catalysts
Multiple key programs remain early-stage with binary go/no-go or readout risk: IND-enabling decisions for PI3K and ENPP1 expected H2 2026, RBM39 early Phase 1 update in 2026, and many other clinical updates pushed into 2027 — reflecting substantial near-term execution risk.
Inherent sector probability of failure
Management acknowledged drug discovery is highly probabilistic with an industry failure rate cited around 90%, underscoring the ongoing risk that many pipeline programs may not succeed despite platform advantages.
Tolerability and clinical validation still required for multiple assets
Programs such as MALT1, LSD1 and PI3K historically face tolerability challenges; while assets are engineered to mitigate these risks, clinical validation of improved tolerability is still outstanding and necessary to realize the thesis.
Reliance on future milestones and partnership cash inflows
Extension of runway to early 2028 reflects cost cuts and milestone probability-weighting; continued operations depend materially on achieving future partner milestones and inflows, which are inherently uncertain.
Finite runway despite efficiencies
Even after efficiency gains and a $754M cash balance, the company’s runway to early 2028 implies limited multi-year visibility absent additional milestones, financing, or material commercial revenue.
Investor/partner signal: NVIDIA divestment noted
Public divestment by NVIDIA (portfolio repositioning) was raised as a question—while Recursion states technical partnerships remain strong, the 13F-based divestment could be perceived as an investor sentiment/headline risk despite ongoing collaboration.
Company Guidance
Management updated that Recursion finished 2025 with $754M in cash, has extended its runway to early 2028, and expects 2026 cash operating expenses under $390M (non‑GAAP) after a 35% pro forma YoY reduction in operating expenses and coming in ~10% below prior guidance; cumulative partner inflows exceed $500M (including $134M from Sanofi to date: $100M upfront + ~$34M milestones), with partner programs carrying >$300M of potential milestones and tiered royalties up to double digits, and milestone receipts are probability‑weighted in cash forecasts (a milestone was hit earlier this month). Platform efficiency metrics tied to this guidance include synthesizing ~330 compounds versus ~2,500 industry (~90% fewer), shortening target‑to‑candidate timelines to ~17 months versus ~40–42 months (~2× faster), generating >100M in silico molecules, holding >50 PB of multimodal data, and leveraging >300M real‑world lives in the clinical AI platform (improving enrollment 1.3–1.6× and starting studies up to 3 months faster). Near‑term program timing: FDA engagement for REC‑4881 in 2026, RBM39 early Phase 1 safety/PK in 2026, go/no‑go decisions for PI3K and ENPP1 in H2 2026, and additional REC‑4881 and CDK7 combo data in 2027.Recursion Pharmaceuticals Financial Statement Overview
Summary
Strong and accelerating revenue growth, plus a relatively supportive balance sheet with sizable equity and modest debt. Offsetting this, losses are very large and widening and operating/free cash flow remain deeply negative, implying continued funding dependence despite runway.Income Statement
Revenue growth is strong and accelerating (2023: ~11%, 2024: ~34%, 2025: ~72% annual), which is a key positive. However, profitability remains very weak: 2025 shows a large net loss (~-$645M) on ~$74.7M of revenue, and losses have widened versus 2024 (net loss ~-$464M) and 2023 (~-$328M). Gross profit is positive in recent years but small relative to operating costs (2025 gross profit ~$3.7M), keeping operating and net margins deeply negative.24
Negative
Balance Sheet
The balance sheet looks relatively supportive for a development-stage biotech: stockholders’ equity is sizable and has grown meaningfully (2023: ~$463M to 2024: ~$1.03B to 2025: ~$1.13B), alongside a larger asset base (2025 assets ~$1.47B). Leverage appears modest based on prior-year debt-to-equity levels (2023–2024 around ~0.10), and total debt decreased in 2025 (~$78M vs ~$108M in 2024). The key weakness is persistently negative returns on equity (e.g., 2024), reflecting heavy losses and ongoing dilution/financing needs risk if cash burn continues.68
Positive
Cash Flow
Cash generation remains a major concern: operating cash flow is consistently negative and very large in absolute terms (2025: ~-$372M; 2024: ~-$359M; 2023: ~-$288M), with free cash flow also deeply negative (2025: ~-$378M). Free cash flow deterioration in 2025 (growth ~-15.6%) suggests burn is not improving. A partial positive is that free cash flow roughly tracks reported losses in 2023–2024 (free cash flow to net income near ~1), indicating losses are not purely non-cash—but the magnitude of ongoing cash burn still implies continued reliance on external funding.28
Negative
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 74.68M | 58.84M | 43.88M | 39.68M | 10.00M |
| Gross Profit | 3.73M | 13.60M | 1.29M | -8.59M | 10.00M |
| EBITDA | -561.19M | -426.72M | -307.63M | -227.66M | -175.12M |
| Net Income | -644.76M | -463.66M | -328.07M | -239.48M | -186.48M |
Balance Sheet | |||||
| Total Assets | 1.47B | 1.45B | 653.70M | 701.29M | 610.35M |
| Cash, Cash Equivalents and Short-Term Investments | 743.29M | 594.35M | 391.56M | 549.91M | 516.56M |
| Total Debt | 77.97M | 108.49M | 50.67M | 51.01M | 11.48M |
| Total Liabilities | 343.26M | 413.82M | 190.26M | 215.48M | 67.41M |
| Stockholders Equity | 1.13B | 1.03B | 463.44M | 485.81M | 542.94M |
Cash Flow | |||||
| Free Cash Flow | -378.28M | -372.87M | -300.33M | -120.88M | -198.41M |
| Operating Cash Flow | -371.81M | -359.17M | -287.78M | -83.52M | -158.61M |
| Investing Cash Flow | -16.87M | 260.06M | -10.23M | 193.25M | -271.74M |
| Financing Cash Flow | 521.53M | 304.12M | 140.13M | 154.34M | 458.54M |
Recursion Pharmaceuticals Technical Analysis
Negative
3.77
Price Trends
4.22
Negative
4.67
Negative
4.87
Negative
Market Momentum
-0.23
Negative
46.40
Neutral
57.23
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RXRX, the sentiment is Negative. The current price of 3.77 is below the 20-day moving average (MA) of 3.81, below the 50-day MA of 4.22, and below the 200-day MA of 4.87, indicating a bearish trend. The MACD of -0.23 indicates Negative momentum. The RSI at 46.40 is Neutral, neither overbought nor oversold. The STOCH value of 57.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RXRX.
Recursion Pharmaceuticals Risk Analysis
Recursion Pharmaceuticals disclosed 107 risk factors in its most recent earnings report. Recursion Pharmaceuticals 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
Recursion Pharmaceuticals Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
64 Neutral | $3.30B | -76.19 | -28.17% | ― | 129.21% | 80.35% | |
53 Neutral | $1.84B | -2.08 | -91.06% | ― | -32.98% | -18.46% | |
52 Neutral | $1.78B | -4.21 | -30.20% | ― | 36.26% | -158.98% | |
52 Neutral | $2.50B | -12.48 | -34.78% | ― | ― | -34.96% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
49 Neutral | $2.45B | -40.66 | -28.23% | ― | 42.57% | 60.03% | |
47 Neutral | $2.30B | 5.71 | -16.45% | ― | ― | ― |
* Healthcare Sector Average
RXRX
Recursion Pharmaceuticals
3.77
-4.57
-54.80%
AGIO
Agios Pharma
29.96
-4.48
-13.01%
GLPG
Galapagos
34.02
7.62
28.86%
ADPT
Adaptive Biotechnologies
16.21
7.85
93.90%
ARQT
Arcutis Biotherapeutics
27.01
13.79
104.31%
IRON
Disc Medicine
66.89
12.43
22.82%
Recursion Pharmaceuticals Corporate Events
Business Operations and StrategyFinancial Disclosures
Recursion Highlights AI Validation, Extends Cash Runway to 2028
Positive
Feb 25, 2026
On February 25, 2026, Recursion reported fourth-quarter and full-year 2025 results and a business update, highlighting its first AI-enabled clinical validation in familial adenomatous polyposis (FAP) and continued advancement of five differentiated clinical programs. The company ended 2025 with $754 million in cash and cash equivalents, said it had exceeded prior cost-savings guidance, and now projects a cash runway into early 2028, underscoring disciplined capital allocation while investing in its AI-powered Recursion Operating System and pipeline.
The company also emphasized momentum in its partnerships, including a fifth progress-based milestone with Sanofi in February 2026, bringing total payments from that collaboration to $134 million and supporting a growing joint portfolio of AI-designed immunology and oncology programs. Recursion has additionally received $213 million in upfront and milestone payments from its Roche and Genentech collaboration, where accepted large-scale CRISPR-based Phenomaps in neuroscience and gastrointestinal oncology are generating new biological insights expected to seed early-stage programs from 2026 onward.
The most recent analyst rating on (RXRX) stock is a Buy with a $4.50 price target. To see the full list of analyst forecasts on Recursion Pharmaceuticals stock, see the RXRX Stock Forecast page.
Business Operations and StrategyFinancial Disclosures
Recursion Updates AI Drug Platform, Financial Outlook at JPM
Positive
Jan 12, 2026
On January 12, 2026, Recursion Pharmaceuticals released an updated investor presentation ahead of its use at the JP Morgan Healthcare Conference, outlining progress on its AI-driven drug discovery platform, clinical pipeline and financial outlook. The company highlighted its first AI-enabled clinical proof-of-concept in familial adenomatous polyposis (REC-4881), a portfolio of roughly five wholly owned clinical programs and about 15 discovery-stage assets, alongside external validation through milestones with partners such as Sanofi, Roche and Genentech. Recursion reported an unaudited year-end 2025 cash position of $755 million and guided for an expected cash runway through year-end 2027, supported in part by risk-adjusted partnership inflows, while signaling tighter cost discipline with an anticipated 2026 cash burn of under $390 million and roughly a 35% reduction in pro forma operating expenses from 2024 to 2026. Management emphasized a strategic focus on translating platform insights into clinical proof points, scaling generative drug design and AI-powered clinical development, and enforcing rigorous portfolio prioritization and enterprise efficiency, positioning the company as a leading AI-native player in the evolving drug discovery and development landscape.
The most recent analyst rating on (RXRX) stock is a Hold with a $7.00 price target. To see the full list of analyst forecasts on Recursion Pharmaceuticals stock, see the RXRX Stock Forecast page.
Business Operations and StrategyProduct-Related Announcements
Recursion Pharmaceuticals Reports Positive TUPELO Trial Results
Positive
Dec 8, 2025
On December 8, 2025, Recursion Pharmaceuticals announced positive results from the Phase 1b/2 TUPELO trial of REC-4881, an investigational MEK1/2 inhibitor for familial adenomatous polyposis (FAP). The trial demonstrated rapid and durable reductions in polyp burden, with 75% of patients showing improvement after 12 weeks of treatment, and 82% maintaining reductions 12 weeks post-treatment. These findings are significant given the lack of approved therapies for FAP, a condition with a high risk of colorectal cancer. The results validate Recursion’s AI-driven approach and suggest REC-4881 could offer a non-surgical treatment option, potentially impacting the company’s market positioning and providing hope for patients with FAP.
The most recent analyst rating on (RXRX) stock is a Hold with a $4.50 price target. To see the full list of analyst forecasts on Recursion Pharmaceuticals stock, see the RXRX Stock Forecast page.
Private Placements and FinancingRegulatory Filings and Compliance
Recursion Pharmaceuticals Registers Resale of 7 Million Shares
Neutral
Nov 26, 2025
On November 26, 2025, Recursion Pharmaceuticals filed a prospectus supplement to register for resale over 7 million shares of its Class A common stock issued to Tempus AI, Inc. as payment for annual license fees. This move, made under an exemption from registration, highlights Recursion’s strategic financial maneuvers to manage its equity and partnerships, potentially impacting its market positioning and stakeholder interests.
The most recent analyst rating on (RXRX) stock is a Hold with a $4.00 price target. To see the full list of analyst forecasts on Recursion Pharmaceuticals stock, see the RXRX Stock Forecast page.
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.