Recursion Pharmaceuticals (RXRX) AI Stock Analysis

• Market Cap: $2.12B
• Dividend Yield: N/A
• Average Volume (3M): 20.89M
• Price to Earnings (P/E): ―
• Beta (1Y): 3.27
• Revenue Growth: 30.14%
• EPS Growth: -10.08%
• Country: US
• Employees: 800
• Sector: Healthcare
• Sector Strength: 45
• Industry: Biotechnology
• EPS (TTM): -0.41
• Shares Outstanding: 427,312,960
• 10 Day Avg. Volume: 31,090,157
• 30 Day Avg. Volume: 20,889,206
• 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: 0.79
• 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: 46 Neutral
• Price Target: $4.50 ▼(-2.81% Downside)

Recursion Pharmaceuticals faces significant challenges in achieving profitability, as reflected in its financial performance score. The technical analysis indicates a bearish trend, and the valuation is constrained by negative earnings. However, the earnings call provided some optimism with technological advancements and cash management, slightly boosting the overall score.

Positive Factors

Technological Advancements

The integration of Recursion OS 2.0 enhances drug discovery and development efficiency, potentially reducing time to market and increasing competitiveness.

Strong Cash Position

A robust cash position provides financial stability, supporting ongoing R&D and operational activities, and extending the cash runway through Q4 2027.

Partnership Milestones

Successful partnerships with major pharmaceutical companies like Sanofi and Roche enhance revenue potential and validate Recursion's platform capabilities.

Negative Factors

Profitability Challenges

Ongoing profitability challenges necessitate cost management and operational efficiency improvements to ensure long-term financial sustainability.

Long Drug Development Timelines

Extended drug development timelines can delay revenue generation and increase the risk of competitive disadvantage in the fast-paced biotech industry.

Regulatory Uncertainties

Regulatory uncertainties can impact the approval process and market entry timing, affecting potential revenue streams and strategic planning.

Recursion Pharmaceuticals Business Overview & Revenue Model

Company Description

Recursion 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 Money

Recursion Pharmaceuticals generates revenue through a combination of drug development partnerships, licensing agreements, and potential future product sales. The company collaborates with other pharmaceutical companies and research institutions, which may include co-development arrangements that provide upfront payments, milestone payments based on development progress, and royalties on future product sales. Additionally, Recursion's advanced platform allows it to create value by identifying new therapeutic targets and potential drug candidates, which can lead to strategic partnerships and collaborations with larger biopharmaceutical firms. The company's focus on rare diseases often attracts grants and funding from both public and private sources, contributing to its overall financial sustainability.

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: 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 4.63 is below the 20-day moving average (MA) of 4.75, below the 50-day MA of 5.26, and below the 200-day MA of 5.92, indicating a bearish trend. The MACD of -0.08 indicates Negative momentum. The RSI at 41.77 is Neutral, neither overbought nor oversold. The STOCH value of 30.01 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
AGIO	59 Neutral	2.17B	3.31	47.47%	―	30.57%	―
ARQT	58 Neutral	2.07B	-22.47	-67.11%	―	99.50%	65.91%
GLPG	56 Neutral	2.16B	-6.95	-10.75%	―	―	―
ADPT	56 Neutral	1.95B	-16.13	-67.46%	―	21.60%	44.48%
RXRX	46 Neutral	$2.12B	―	-86.34%	―	30.14%	-10.08%
IRON	43 Neutral	2.17B	-13.97	―	―	―	-22.19%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

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.