Recursion Pharmaceuticals, Inc. (RXRX) | Investment Case

1. Company Snapshot

1.a. 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.

Show Full description

1.b. Last Insights on RXRX

Recent negative drivers behind Recursion Pharmaceuticals' performance include a Q3 loss of $0.34 per share, missing revenue estimates. The company's quarterly loss was $0.01 higher than expected, indicating a decline in its financial performance. Additionally, Recursion's stock price has been volatile, with a -0.89% move from its prior day's close on October 30, 2024. The company's recent presentation at the 43rd Annual JP Morgan Healthcare Conference may provide some insight into its future prospects, but the current earnings release suggests a decline in its financial performance.

1.c. Company Highlights

Last Price	4.71
Change Percentage	-4.27%
Open	4.87
Previous Close	4.92
Market Cap ( Millions)	1888
Volume	16479275
Year High	12.36
Year Low	3.79
M A 50	5.13
M A 200	5.36

FCF Yield	-20.72%
Dividend Yield	0.00%
ROE	-76.07%
Debt / Equity	9.58%
Net Debt / EBIDTA	75.43%
Price To Book	2.14
Price Earnings Ratio	-3.03
Price To FCF	-4.83
Price To sales	29.3
EV / EBITDA	-2.48

2. Recursion Pharmaceuticals' Q3 2025 Earnings: A Strong Foundation for Future Growth

Recursion Pharmaceuticals reported a loss per share of -$0.36, beating analyst estimates of -$0.38. The company's cash balance stood at $785 million as of October 9, providing a runway through the end of 2027 without additional financing. Revenue growth is expected to be 27.5% next year, according to analyst estimates. With a pro forma cash balance of almost $800 million, the company is well-positioned to drive its pipeline forward and achieve key milestones.

Publication Date: Nov -21

                                    📋 Highlights
                                    Leadership Transition:
                                                Christopher Gibson will step down as CEO in 2026, succeeded by Najat Khan, who emphasizes disciplined capital use and platform-driven innovation.
Financial Strength:
                                                Recursion holds $785M in cash as of October 2025, with $500M+ in partnership inflows and a $30M Roche/Genentech milestone, providing runway through 2027.
Clinical Progress:
                                                CDK7 monotherapy achieved a 10mg max tolerated dose with antitumor activity; REC-4881 showed 43% poly burden reduction in early trials.
Platform & AI Integration:
                                                Recursion OS leverages AI for biology, molecule design, and patient selection, with 100B+ GI oncology cells analyzed via collaborations.
Cost Efficiency:
                                                35% expense reduction in 2025, with 2025/2026 guidance at <$450M and <$390M, respectively, and $100M+ expected partnership inflows by 2026.

                                

Financial Performance

The company's financial performance was marked by a significant milestone payment of $30 million from Roche and Genentech, bringing total cash inflows from partnerships to over $500 million. The company's expense reduction of 35% from 2024 and reaffirmed guidance for 2025 and 2026 on an expense base of less than $450 million and less than $390 million, respectively, demonstrate its commitment to capital stewardship. With a P/S Ratio of 23.95, the market is pricing in significant revenue growth, which is expected to materialize with the company's pipeline advancements.

Pipeline Advancements

The company's pipeline is making significant progress, with the CDK7 combination cohorts initiated and tumor regression observed in both ovarian and breast cancer. The monotherapy dose escalation achieved a maximum tolerated dose of 10 milligrams once daily with a manageable safety profile and preliminary antitumor activity. The company is also making progress in its other program, REC-4881, in rare inherited disorder APC loss of function, with a median reduction in total poly burden of 43% in an early data set.

Valuation

With a P/E Ratio of -2.48 and an EV/EBITDA of -1.89, the market is pricing in significant future growth. The company's ROE of -76.07% and ROIC of -55.51% indicate that it is still in the investment phase, with a focus on driving growth rather than generating profits. As the company advances its pipeline and achieves key milestones, investors will be watching closely to see if the company can translate its investments into tangible returns.

Partnerships and Collaborations

Najat Khan, the incoming CEO, emphasized the importance of partnerships and collaborations, highlighting the company's deep and highly collaborative relationships with Roche Genentech and Sanofi. The company is open to new partnerships that drive value for both parties, and its platform capabilities are attracting significant interest from major players in the industry.

3. NewsRoom

10 AI Stocks Worth Buying Right Now

Dec -04

Source: fool.com

Recursion Announces Webinar For Upcoming Clinical Data Readout on the TUPELO Phase 1b/2 Trial of REC-4881 in Familial Adenomatous Polyposis on December 8, 2025

Dec -01

Source: globenewswire.com

Recursion Pharmaceuticals, Inc. $RXRX Shares Purchased by Handelsbanken Fonder AB

Dec -01

Source: defenseworld.net

Miss These Genesis Mission Stocks, and You’ll Regret It for a Decade

Dec -01

Source: investorplace.com

Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX) Receives $7.25 Average Price Target from Analysts

Nov -25

Source: defenseworld.net

Could Recursion Pharmaceuticals Be the Next Big Artificial Intelligence (AI) Stock?

Nov -24

Source: fool.com

Recursion Pharmaceuticals, Inc. (RXRX) Presents at Jefferies London Healthcare Conference 2025 Transcript

Nov -22

Source: seekingalpha.com

Is Recursion Pharmaceuticals a Meme Stock?

Nov -19

Source: fool.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (26.43%)

6. Segments

Drug Discovery

Expected Growth: 26.43%

Recursion Pharmaceuticals' 26.43% growth in Drug Discovery is driven by its AI-powered drug repurposing platform, increasing partnerships with pharma companies, and a strong pipeline of potential treatments for rare genetic diseases. The company's unique approach to identifying new uses for existing drugs is also fueling growth, as it reduces development costs and timelines.

7. Detailed Products

Recursion OS

A cloud-based platform that integrates and analyzes large amounts of biological data to identify potential therapeutic targets

Recursion Map

A comprehensive database of cellular biology that maps the behavior of cells in response to various perturbations

Recursion FX

A high-throughput, automated microscopy platform that enables the analysis of cellular phenotypes at scale

Recursion Discover

A suite of machine learning and computer vision tools that enable the analysis of large datasets and identification of patterns

8. Recursion Pharmaceuticals, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Recursion Pharmaceuticals, Inc. is medium due to the presence of alternative treatments and therapies for genetic diseases.

Bargaining Power Of Customers

The bargaining power of customers for Recursion Pharmaceuticals, Inc. is low due to the lack of negotiating power of individual patients and the high demand for innovative treatments.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Recursion Pharmaceuticals, Inc. is medium due to the presence of multiple suppliers for raw materials and equipment, but the high cost of switching suppliers.

Threat Of New Entrants

The threat of new entrants for Recursion Pharmaceuticals, Inc. is high due to the increasing interest in genetic research and the potential for new companies to enter the market.

Intensity Of Rivalry

The intensity of rivalry for Recursion Pharmaceuticals, Inc. is high due to the presence of established companies in the genetic research and treatment market, and the high competition for market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	1.54%
Debt Cost	3.95%
Equity Weight	98.46%
Equity Cost	8.17%
WACC	8.11%
Leverage	1.57%

11. Quality Control: Recursion Pharmaceuticals, Inc. passed 4 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

aTyr Pharma

A-Score: 4.6/10

Value: 7.6

Growth: 6.4

Quality: 6.8

Yield: 0.0

Momentum: 5.0

Volatility: 1.7

1-Year Total Return ->

Veracyte

A-Score: 4.3/10

Value: 1.2

Growth: 8.4

Quality: 6.4

Yield: 0.0

Momentum: 6.0

Volatility: 3.7

1-Year Total Return ->

Taysha Gene Therapies

A-Score: 4.2/10

Value: 6.2

Growth: 4.9

Quality: 4.2

Yield: 0.0

Momentum: 9.0

Volatility: 0.7

1-Year Total Return ->

Verrica Pharmaceuticals

A-Score: 3.4/10

Value: 9.0

Growth: 3.7

Quality: 6.0

Yield: 0.0

Momentum: 0.5

Volatility: 1.0

1-Year Total Return ->

Alector

A-Score: 2.8/10

Value: 7.8

Growth: 3.7

Quality: 3.7

Yield: 0.0

Momentum: 1.0

Volatility: 0.7

1-Year Total Return ->

Recursion Pharmaceuticals

A-Score: 2.8/10

Value: 6.8

Growth: 3.9

Quality: 3.4

Yield: 0.0

Momentum: 2.0

Volatility: 0.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

16.77%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

8.11%

Recursion Pharmaceuticals, Inc. - US75629V1044

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on RXRX

1.c. Company Highlights

Average Quality

Medium Volatility

Fairly Valued

Earnings Beats

Revenues Beats

Stable Momentum

Earnings Miss

Revenues Miss

Lower Quality

Weak Momentum

Average Growth

2. Recursion Pharmaceuticals' Q3 2025 Earnings: A Strong Foundation for Future Growth

Financial Performance

Pipeline Advancements

Valuation

Partnerships and Collaborations

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (26.43%)

6. Segments

Drug Discovery

Expected Growth: 26.43%

7. Detailed Products

Recursion OS

Recursion Map

Recursion FX

Recursion Discover

8. Recursion Pharmaceuticals, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Recursion Pharmaceuticals, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

4.71$

Current Price

4.71$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA