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Recursion Pharmaceuticals (RXRX)
NASDAQ:RXRX
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Recursion Pharmaceuticals (RXRX) AI Stock Analysis

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RXRX

Recursion Pharmaceuticals

(NASDAQ:RXRX)

Rating:61Neutral
Price Target:
$7.00
▲(8.86%Upside)
Recursion Pharmaceuticals' stock score is primarily influenced by technical analysis indicating strong upward momentum, offset by financial performance challenges and valuation concerns. Strategic partnerships and pipeline advancements are promising, but profitability and cash flow issues, along with a workforce reduction strategy, highlight significant risks.
Positive Factors
Partnership Success
Partnerships appear to be progressing well, with another $7M milestone received from Sanofi and potential for $300M for the program.
Pipeline Focus
The re-focusing of the pipeline is seen as a net positive that should help the market narrow in on key data sets.
Strategic Acquisition
Recursion acquired full rights to Rallybio's REV102, a preclinical oral ENPP1 inhibitor for hypophosphatasia, which could provide a strategic advantage.
Negative Factors
Cash Burn Concerns
Elevated cash burn and dilutive financing are concerning despite the potential for positive surprises from collaboration milestones.
Program Deprioritization
The discontinuation of the NF2, CCM, and C. difficile programs reflects a cut in the most advanced assets in the portfolio.
Workforce Reduction
Recursion announced a ~20% workforce reduction.

Recursion Pharmaceuticals (RXRX) vs. SPDR S&P 500 ETF (SPY)

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 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 Key Performance Indicators (KPIs)

Any
Any
Revenue by Segment
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.
Chart InsightsRecursion Pharmaceuticals' operating revenue has shown a significant upward trend, reflecting the company's strategic focus on refining its R&D portfolio and leveraging its Recursion Operating System 2.0. The recent earnings call highlights successful partnerships and platform evolution, which have bolstered financials despite challenges with certain program discontinuations. The emphasis on oncology and rare diseases, along with disciplined capital allocation, supports a cautiously optimistic outlook. However, the sharp decline in grant revenue underscores the need for sustained operational success to offset reduced external funding.
Data provided by:Main Street Data

Recursion Pharmaceuticals Earnings Call Summary

Earnings Call Date:May 05, 2025
(Q1-2025)
|
% Change Since: 12.81%|
Next Earnings Date:Aug 12, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a balanced sentiment. While Recursion highlighted strong financials, successful platform evolution, and significant partnerships, they also faced challenges with program discontinuations and limited success in certain trials. The company's focus on pipeline advancements and strategic partnerships suggests a cautiously optimistic outlook.
Q1-2025 Updates
Positive Updates
Strong Financial Position
Recursion ended the quarter with $509 million in cash and expects a cash runway into mid-2027. The company has brought in $450 million from partnerships to date.
Successful Platform Evolution
The evolution from Recursion 0.1 to Recursion 2.0 has enabled the company to validate hypotheses more quickly, generate candidates with fewer molecules synthesized, and spend less while moving faster.
Partnership Milestones
Recursion has achieved four milestones with Sanofi and a major milestone with Roche, highlighting strong external validation of their approach.
Pipeline Advancements
The company is advancing over five internally developed programs with first or best-in-class potential, targeting unmet needs with a clear and efficient path to development.
Negative Updates
Program Discontinuations
Recursion has decided to deprioritize three programs (NF2, CCM, and C. diff) and place LSD1 on a strategic pause after evaluating their potential and strategic fit.
Limited Success in NF2 Trial
The NF2 program did not meet the futility threshold in combined dose arms, with limited tumor shrinkage and clinical activity.
Challenges with CCM Program
The CCM program showed promising trends at 400 mg but lacked statistically significant results, leading to its discontinuation.
Company Guidance
In the recent earnings call, Chris Gibson, CEO of Recursion, highlighted the company's strategic focus on refining its R&D portfolio and leveraging its Recursion Operating System 2.0. The company is prioritizing over five clinical and preclinical programs, with a particular emphasis on oncology and rare diseases, aiming for first or best-in-class potential. Recursion has successfully brought in more than $450 million through collaborations, including a recent fourth program option from Sanofi. The company aims to validate hypotheses faster, generate candidates with fewer synthesized molecules, and reduce costs while accelerating development. Additionally, the company remains focused on disciplined capital allocation, maintaining a cash runway into mid-2027, with a projected operational budget of $450 million or less for 2025.

Recursion Pharmaceuticals Financial Statement Overview

Summary
Recursion Pharmaceuticals demonstrates substantial revenue growth, but consistent profitability challenges persist. The company maintains a stable balance sheet with low leverage, though it relies heavily on external financing due to negative cash flows and operational inefficiencies.
Income Statement
45
Neutral
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
55
Neutral
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
50
Neutral
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.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue58.84M44.58M39.68M10.00M3.41M
Gross Profit13.60M1.99M-8.59M896.00K-59.91M
EBITDA-426.72M-299.57M-227.66M-174.42M-81.70M
Net Income-463.66M-328.07M-239.42M-178.07M-87.88M
Balance Sheet
Total Assets1.45B653.70M701.29M610.35M298.58M
Cash, Cash Equivalents and Short-Term Investments594.35M391.56M549.91M516.56M262.13M
Total Debt108.49M50.67M51.01M11.48M15.66M
Total Liabilities413.82M190.26M215.48M67.41M504.87M
Stockholders Equity1.03B463.44M485.81M542.94M-206.29M
Cash Flow
Free Cash Flow-372.87M-300.33M-120.88M-198.41M-52.13M
Operating Cash Flow-359.17M-287.78M-83.52M-158.61M-45.40M
Investing Cash Flow260.06M-10.23M193.25M-271.74M-8.74M
Financing Cash Flow304.12M140.13M154.34M458.54M246.13M

Recursion Pharmaceuticals Technical Analysis

Technical Analysis Sentiment
Positive
Last Price6.43
Price Trends
50DMA
5.02
Positive
100DMA
5.34
Positive
200DMA
6.25
Positive
Market Momentum
MACD
0.32
Negative
RSI
67.25
Neutral
STOCH
65.68
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RXRX, the sentiment is Positive. The current price of 6.43 is above the 20-day moving average (MA) of 5.49, above the 50-day MA of 5.02, and above the 200-day MA of 6.25, indicating a bullish trend. The MACD of 0.32 indicates Negative momentum. The RSI at 67.25 is Neutral, neither overbought nor oversold. The STOCH value of 65.68 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RXRX.

Recursion Pharmaceuticals Risk Analysis

Recursion Pharmaceuticals disclosed 105 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

Overall Rating
UnderperformOutperform
Sector (52)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
80
Outperform
$2.14B14.1924.71%20.62%14.08%
62
Neutral
$2.69B-31.51%
61
Neutral
$2.78B-86.10%29.32%-11.00%
54
Neutral
$1.73B-70.58%100.03%64.22%
52
Neutral
$7.61B0.04-62.94%2.44%16.14%0.33%
45
Neutral
$2.10B-35.21%-100.00%-144.79%
40
Underperform
$4.14B
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
RXRX
Recursion Pharmaceuticals
6.43
-1.62
-20.12%
DNLI
Denali Therapeutics
14.47
-9.62
-39.93%
ARQT
Arcutis Biotherapeutics
14.91
4.81
47.62%
HRMY
Harmony Biosciences Holdings
37.22
3.92
11.77%
NAMS
NewAmsterdam Pharma Company
23.98
5.26
28.10%
MTSR
Metsera, Inc.
39.99
12.19
43.85%

Recursion Pharmaceuticals Corporate Events

M&A Transactions
Recursion Pharmaceuticals Acquires ENPP1 Inhibitor Program
Positive
Jul 8, 2025

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.

The most recent analyst rating on (RXRX) stock is a Hold with a $5.00 price target. To see the full list of analyst forecasts on Recursion Pharmaceuticals stock, see the RXRX Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Recursion Pharmaceuticals Holds Annual Stockholder Meeting
Neutral
Jun 18, 2025

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.

The most recent analyst rating on (RXRX) stock is a Hold with a $8.00 price target. To see the full list of analyst forecasts on Recursion Pharmaceuticals stock, see the RXRX Stock Forecast page.

Business Operations and Strategy
Recursion Pharmaceuticals Announces Workforce Reduction Strategy
Negative
Jun 10, 2025

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.

The most recent analyst rating on (RXRX) stock is a Hold with a $8.00 price target. To see the full list of analyst forecasts on Recursion Pharmaceuticals stock, see the RXRX Stock Forecast page.

Private Placements and FinancingBusiness Operations and StrategyRegulatory Filings and Compliance
Recursion Pharmaceuticals Registers Shares for Resale
Neutral
May 9, 2025

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.

Business Operations and StrategyFinancial Disclosures
Recursion Pharmaceuticals Reports Q1 Results and Strategy Update
Positive
May 5, 2025

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.

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.Date of analysis: Jul 22, 2025