Recursion Pharmaceuticals (RXRX) AI Stock Analysis

• Market Cap: $2.04B
• Dividend Yield: N/A
• Average Volume (3M): 22.10M
• Price to Earnings (P/E): ―
• Beta (1Y): 3.26
• Revenue Growth: 30.14%
• EPS Growth: -10.08%
• Country: US
• Employees: 800
• Sector: Healthcare
• Sector Strength: 51
• Industry: Biotechnology
• EPS (TTM): -0.41
• Shares Outstanding: 427,312,960
• 10 Day Avg. Volume: 16,372,583
• 30 Day Avg. Volume: 22,100,106
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.82
• Enterprise Value/Revenue: 25.94
• Enterprise Value/Gross Profit: -690.22
• Enterprise Value/Ebitda: -2.86
• 1Y Price Target: $5.95
• Price Target Upside: 28.51% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 5

• Rating: 50 Neutral
• Price Target: $5.50 ▲(18.79% Upside)

Recursion Pharmaceuticals' overall stock score reflects a challenging financial performance with ongoing profitability and cash flow issues. Technical indicators suggest neutral momentum, while valuation metrics highlight the company's current losses. Positive developments in technology and partnerships, as well as strategic corporate actions, provide some optimism, but concerns about drug development timelines and regulatory hurdles remain significant.

Positive Factors

Cash Management

A workforce reduction and cash burn guidance extend the financial runway into the fourth quarter of 2027.

Partnership Milestones

RXRX achieved a $7mm discovery milestone under the Sanofi collaboration for lead series development of an immunology target.

Strategic Acquisitions

Recursion acquired full rights to Rallybio's REV102, a preclinical oral ENPP1 inhibitor for hypophosphatasia, which could provide a strategic advantage.

Negative Factors

Adverse Events

Approximately 80% of patients in the ongoing study experienced at least one treatment-related adverse event.

Pipeline Discontinuation

RXRX announced discontinuation of its most advanced pipeline assets.

R&D Expenses

R&D expenses of $128.6mm were significantly above the consensus expectations.

Recursion Pharmaceuticals Business Overview & Revenue Model

Company Description

Recursion Pharmaceuticals (RXRX) is a biotechnology company that leverages advanced computational technology and experimental biology to discover and develop new treatments for various diseases. The company operates at the intersection of technology and biology, focusing on the use of artificial intelligence and machine learning to accelerate drug discovery. Their platform integrates high-throughput biology, artificial intelligence, and automation to efficiently identify potential therapies across multiple therapeutic areas.

How the Company Makes Money

Recursion Pharmaceuticals primarily makes money through partnerships with pharmaceutical companies and other biotech firms, where they collaborate on drug discovery and development projects using Recursion's technology platform. These partnerships often include upfront payments, milestone payments tied to the development progress, and potential royalties on products that reach the market. Additionally, the company may also generate revenue through licensing its proprietary platform and technology to other companies, enabling them to use Recursion's AI-driven insights into drug discovery and development. Significant partnerships and collaborations with leading pharmaceutical companies contribute to Recursion's revenue model, allowing them to leverage external expertise and financial resources to further their research and development activities.

Recursion Pharmaceuticals Financial Statement Overview

Summary

Recursion Pharmaceuticals is experiencing revenue growth, but profitability remains a significant challenge. The company has a solid equity base and low leverage, which are strengths. However, negative profit margins and cash flow issues highlight the need for operational improvements and cost management to achieve financial stability.

Income Statement

Recursion Pharmaceuticals shows a consistent increase in revenue, with a TTM growth rate of 8.04%. However, the company is struggling with negative profit margins, including a gross profit margin of -3.57% and a net profit margin of -10.05% in the TTM. The EBIT and EBITDA margins are also negative, indicating operational inefficiencies. The company needs to focus on improving its cost structure to achieve profitability.

Balance Sheet

The company maintains a low debt-to-equity ratio of 0.096, suggesting conservative leverage. However, the return on equity is negative at -76.07%, reflecting significant losses relative to shareholder equity. The equity ratio stands at 70.58%, indicating a strong equity base relative to total assets, which is a positive aspect.

Cash Flow

Recursion Pharmaceuticals faces challenges with negative operating and free cash flows, with a TTM operating cash flow of -$383 million. The free cash flow growth rate is negative, and the operating cash flow to net income ratio is -2.34, indicating cash flow issues. The free cash flow to net income ratio is slightly positive at 1.02, suggesting some alignment between cash flow and reported earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	64.44M	58.84M	44.58M	39.68M	10.00M	3.41M
Gross Profit	-2.42M	13.60M	1.99M	-8.59M	896.00K	-59.91M
EBITDA	-583.50M	-426.72M	-299.57M	-227.66M	-174.42M	-81.70M
Net Income	-648.97M	-463.66M	-328.07M	-239.42M	-178.07M	-87.88M
Balance Sheet
Total Assets	1.30B	1.45B	653.70M	701.29M	610.35M	298.58M
Cash, Cash Equivalents and Short-Term Investments	528.22M	594.35M	391.56M	549.91M	516.56M	262.13M
Total Debt	88.08M	108.49M	50.67M	51.01M	11.48M	15.66M
Total Liabilities	383.21M	413.82M	190.26M	215.48M	67.41M	504.87M
Stockholders Equity	919.15M	1.03B	463.44M	485.81M	542.94M	-206.29M
Cash Flow
Free Cash Flow	-391.22M	-372.87M	-300.33M	-120.88M	-198.41M	-52.13M
Operating Cash Flow	-383.03M	-359.17M	-287.78M	-83.52M	-158.61M	-45.40M
Investing Cash Flow	257.82M	260.06M	-10.23M	193.25M	-271.74M	-8.74M
Financing Cash Flow	165.29M	304.12M	140.13M	154.34M	458.54M	246.13M

Recursion Pharmaceuticals Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 4.63
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 4.63 is below the 20-day moving average (MA) of 5.13, below the 50-day MA of 5.43, and below the 200-day MA of 6.06, indicating a bearish trend. The MACD of -0.24 indicates Positive momentum. The RSI at 34.85 is Neutral, neither overbought nor oversold. The STOCH value of 14.97 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RXRX.

Recursion Pharmaceuticals Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HRMY	78 Outperform	$2.13B	12.10	27.58%	―	17.74%	59.96%
NAMS	61 Neutral	$2.77B	―	-28.43%	―	―	―
ARQT	58 Neutral	$1.86B	―	-57.33%	―	99.50%	65.91%
Sector *	51 Neutral	$7.90B	-0.33	-41.69%	2.23%	23.45%	-1.99%
RXRX	50 Neutral	$2.04B	―	-86.34%	―	30.14%	-10.08%
DNLI	45 Neutral	$2.23B	―	-39.69%	―	-100.00%	1.62%
MTSR	40 Underperform	$3.71B	―		―	―	―

Recursion Pharmaceuticals Corporate Events

Recursion Pharmaceuticals Reports Q2 2025 Financial Results

On August 5, 2025, Recursion Pharmaceuticals reported its second quarter 2025 financial results and business updates, highlighting a $7 million milestone achieved with Sanofi and advancements in its clinical programs. The company is leveraging its AI-powered platform to drive progress in its pipeline, including the DAHLIA trial for REC-1245 and the ELUCIDATE trial for REC-617, while also expanding its partnerships with Sanofi, Roche, Genentech, Bayer, and Merck KgAa.

Recursion Pharmaceuticals Acquires ENPP1 Inhibitor Program

On July 8, 2025, Recursion Pharmaceuticals acquired full ownership of the ENPP1 inhibitor program, REV102, from Rallybio, aiming to develop a potential first-in-class oral treatment for hypophosphatasia (HPP), a rare genetic disorder. This acquisition is expected to accelerate the development of REV102, leveraging Recursion’s AI/experimental platform to enhance insights and delivery of the treatment, which could significantly impact patients with limited access to existing therapies and potentially reduce long-term management costs.

Recursion Pharmaceuticals Holds Annual Stockholder Meeting

On June 18, 2025, Recursion Pharmaceuticals held its annual meeting of stockholders where key proposals were voted on. Stockholders elected three Class I directors to serve until 2028, approved the executive compensation plan, and ratified the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for 2025. These decisions are expected to influence the company’s governance and financial oversight in the coming years.

Recursion Pharmaceuticals Announces Workforce Reduction Strategy

On June 10, 2025, Recursion Pharmaceuticals announced a 20% reduction in its workforce and infrastructure as part of a streamlined operating strategy. This move is expected to extend the company’s cash runway into the fourth quarter of 2027, despite incurring approximately $11 million in charges related to severance and employee benefits in 2025. The company anticipates cash burn to be under $450 million in 2025 and less than $390 million in 2026, with potential cash inflows exceeding $100 million from milestone payments by the end of 2026. These strategic changes aim to optimize Recursion’s financial position and operational efficiency, potentially impacting its market positioning and stakeholder interests.