Recursion Pharmaceuticals (RXRX) AI Stock Analysis

• Market Cap: $1.83B
• Dividend Yield: N/A
• Average Volume (3M): 22.99M
• Price to Earnings (P/E): ―
• Beta (1Y): 3.55
• Revenue Growth: 29.32%
• EPS Growth: -11.00%
• Country: US
• Employees: 800
• Sector: Healthcare
• Sector Strength: 43
• Industry: Biotechnology
• EPS (TTM): -0.50
• Shares Outstanding: 399,656,600
• 10 Day Avg. Volume: 23,332,911
• 30 Day Avg. Volume: 22,992,017
• PEG Ratio: 0.46
• Price to Book (P/B): 1.87
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -4.35
• Enterprise Value/Market Cap: 0.72
• Enterprise Value/Revenue: 5.68
• Enterprise Value/Gross Profit: -28.76K
• Enterprise Value/Ebitda: -0.79
• 1Y Price Target: $6.75
• Price Target Upside: 49.67% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 5

Recursion Pharmaceuticals is positioned in a critical growth phase, with impressive revenue growth and strategic partnerships offset by profitability challenges and technical weakness. The stock's overall score reflects cautious optimism, with significant potential for growth if operational challenges are addressed.

Positive Factors

AI and Technology Integration

The FDA's support of AI-based computational models could benefit Recursion, given their investment in generating digital maps of biology.

Collaborations and Milestones

Partnerships appear to be progressing well, with another $7M milestone received from Sanofi and potential for $300M for the program.

Strategic Refinement

The strategic refinement of Recursion's sizable pipeline comes at the right time to keep resources focused on programs with the highest likelihood of success and near-term ROI.

Negative Factors

Cash Burn and Dilution

There are concerns about the elevated cash burn and dilutive financing, despite the potential for positive surprises from collaboration milestones.

Program Deprioritization

RXRX shares traded down -16.6% after announcing financial results which saw a deprioritization of four pipeline programs and pausing of another clinical program.

Safety Data Concerns

Safety data for REC-4881 shows a moderate rate of grade 3+ treatment-related adverse events and a somewhat high frequency of treatment discontinuation, dampening the upside.

Recursion Pharmaceuticals Business Overview & Revenue Model

Company Description

Recursion Pharmaceuticals (RXRX) is a biotechnology company that leverages advanced computational techniques and machine learning to accelerate drug discovery and development. The company operates at the intersection of technology and life sciences, utilizing its proprietary platform to identify novel therapeutics across various disease areas. By integrating biology, chemistry, and advanced data analytics, Recursion aims to transform the traditional drug discovery process, making it more efficient and effective.

How the Company Makes Money

Recursion Pharmaceuticals generates revenue primarily through partnerships and collaborations with other pharmaceutical companies. By offering its advanced drug discovery platform, Recursion collaborates with partners to co-develop new therapeutics, often receiving milestone payments, research funding, and potential royalties on successfully commercialized drugs. Additionally, the company may engage in licensing agreements, where it licenses out its platform or specific discoveries to other entities, thus earning licensing fees. Strategic partnerships with larger pharmaceutical firms are a significant factor contributing to Recursion's revenue, allowing the company to leverage its technological advantages while sharing the risks and rewards of drug development.

Recursion Pharmaceuticals Financial Statement Overview

Summary

Recursion Pharmaceuticals shows strong revenue growth but faces challenges in profitability, with negative gross profit margins and substantial net losses. The balance sheet is relatively healthy with low leverage, yet operational inefficiencies affect cash flows, necessitating reliance on external financing.

Income Statement

Recursion Pharmaceuticals shows consistent revenue growth with a significant increase from $3.41 million in 2020 to $59.76 million in TTM 2025. However, the company is struggling with profitability, evidenced by negative gross profit margins and large net losses over the years. EBIT and EBITDA margins are also negative, reflecting ongoing operational challenges.

Balance Sheet

The company's balance sheet shows a relatively healthy equity position with a debt-to-equity ratio of 0.10 in TTM 2025. However, Recursion Pharmaceuticals has been accumulating losses, which could affect future equity. The equity ratio is strong, indicating a low level of leverage. There is a consistent cash reserve, but total liabilities have increased over time.

Cash Flow

The company faces negative free cash flow, but there is a significant operating cash flow improvement from -$453.99 million in 2020 to -$388.83 million in TTM 2025. The free cash flow to net income ratio indicates that cash outflows exceed income, and the company is reliant on external financing for capital needs, as seen in consistent positive financing cash flows.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
59.76M	58.84M	44.58M	39.68M	10.00M	3.41M
	Gross Profit
-46.00K	13.60M	1.99M	-8.59M	896.00K	-59.91M
	EBIT
-574.03M	-479.00M	-350.06M	-245.73M	-182.78M	-84.61M
	EBITDA
-534.16M	-426.72M	-299.57M	-227.66M	-174.42M	-81.70M
	Net Income Common Stockholders
-574.61M	-463.66M	-328.07M	-239.42M	-178.07M	-87.88M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
299.52M	594.35M	391.56M	549.91M	516.56M	262.13M
	Total Assets
557.85M	1.45B	653.70M	701.29M	610.35M	298.58M
	Total Debt
50.97M	108.49M	50.67M	51.01M	11.48M	15.66M
	Net Debt
-248.55M	-485.86M	-340.89M	-498.91M	-273.64M	-246.46M
	Total Liabilities
156.70M	413.82M	190.26M	215.48M	67.41M	504.87M
	Stockholders Equity
401.15M	1.03B	463.44M	485.81M	542.94M	-206.29M
Cash Flow		Free Cash Flow
-398.06M	-372.87M	-300.33M	-120.88M	-198.41M	-52.13M
	Operating Cash Flow
-388.83M	-359.17M	-287.78M	-83.52M	-158.61M	-45.40M
	Investing Cash Flow
259.44M	260.06M	-10.23M	193.25M	-271.74M	-8.74M
	Financing Cash Flow
330.75M	304.12M	140.13M	154.34M	458.54M	246.13M

Recursion Pharmaceuticals Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 4.51
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: 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 4.51 is below the 20-day moving average (MA) of 4.93, below the 50-day MA of 5.36, and below the 200-day MA of 6.60, indicating a bearish trend. The MACD of -0.31 indicates Negative momentum. The RSI at 43.02 is Neutral, neither overbought nor oversold. The STOCH value of 67.02 is Neutral, 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	76 Outperform	$2.06B	13.58	24.71%	―	20.62%	14.08%
NAMS	54 Neutral	$2.14B	―	-31.51%	―	―	―
Sector *	52 Neutral	$5.19B	3.04	-44.20%	2.82%	16.59%	-0.39%
RXRX	52 Neutral	$1.83B	―	-86.10%	―	29.32%	-11.00%
ARQT	51 Neutral	$1.75B	―	-70.58%	―	100.03%	64.22%
DNLI	45 Neutral	$2.02B	―	-35.21%	―	-100.00%	-144.79%
MTSR	40 Underperform	$3.04B	―		―	―	―

Recursion Pharmaceuticals Corporate Events

Recursion Pharmaceuticals Registers Shares for Resale

On May 9, 2025, Recursion Pharmaceuticals filed a prospectus supplement to register for resale over 4.2 million shares of its Class A common stock, which were issued to Tempus Labs as payment for annual license fees under a Master Agreement. This move, made under an exemption from registration, reflects Recursion’s strategic financial operations and its ongoing collaboration with Tempus Labs, potentially impacting its market positioning and shareholder value.

Spark’s Take on RXRX Stock

According to Spark, TipRanks’ AI Analyst, RXRX is a Neutral.

Recursion Pharmaceuticals is positioned in a critical growth phase, with impressive revenue growth and strategic partnerships offset by profitability challenges and technical weakness. The stock’s overall score reflects cautious optimism, with significant potential for growth if operational challenges are addressed.

To see Spark’s full report on RXRX stock, click here.

Recursion Pharmaceuticals Reports Q1 Results and Strategy Update

On May 5, 2025, Recursion Pharmaceuticals reported its first-quarter financial results and business updates, highlighting a focused R&D strategy with a streamlined portfolio in oncology and rare diseases. The company achieved a significant milestone in its collaboration with Sanofi, generating $7 million for a promising autoimmune disease treatment, and continues to advance its partnerships with Roche and Genentech in neuroscience and GI oncology. The company also announced strategic decisions to deprioritize certain programs, ensuring resources are allocated to high-potential projects, and extended its cash runway until mid-2027.

Spark’s Take on RXRX Stock

According to Spark, TipRanks’ AI Analyst, RXRX is a Neutral.

Recursion Pharmaceuticals’ stock score reflects a company in a critical growth phase. Strong revenue growth and strategic partnerships are offset by profitability challenges. The positive sentiment from recent earnings and corporate events suggests potential, but technical indicators and valuation highlight ongoing risks. The overall score signifies cautious optimism, with significant potential for growth if operational challenges are addressed.

To see Spark’s full report on RXRX stock, click here.

Recursion Pharmaceuticals Strengthens Board with New Appointments

On March 18, 2025, Recursion Pharmaceuticals announced the appointment of Dr. Namandjé Bumpus and Elaine Sun to its Board of Directors, effective March 15, 2025. Dr. Bumpus, with her extensive experience in scientific innovation and regulatory strategy from her tenure at the FDA, and Ms. Sun, with her leadership in life sciences finance and corporate strategy, are expected to significantly contribute to Recursion’s growth and strategic direction. This move is seen as a strengthening of the company’s leadership as it continues to expand its clinical pipeline and enhance its platform, potentially impacting its operations and market position positively.

Recursion Pharmaceuticals Reports Strong 2024 Financial Results

On February 28, 2025, Recursion Pharmaceuticals released its fourth-quarter and fiscal year 2024 financial results, highlighting significant advancements in its clinical pipeline and strategic partnerships. The company reported promising data for its drug candidates REC-617 and REC-994, initiated new clinical studies, and achieved substantial milestones with partners like Roche, Genentech, and Sanofi, generating $45 million in cash inflows. Additionally, Recursion completed a business combination with Exscientia, enhancing its position as a leading TechBio company with a robust portfolio of clinical and preclinical programs.