Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX) Just Reported First-Quarter Earnings And Analysts Are Lifting Their Estimates

Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX) defied analyst predictions to release its first-quarter results, which were ahead of market expectations. It looks like a positive result overall, with revenues of US$14m beating forecasts by 5.6%. Statutory losses of US$0.39 per share were 5.6% smaller than the analysts expected, likely helped along by the higher revenues. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Recursion Pharmaceuticals

After the latest results, the seven analysts covering Recursion Pharmaceuticals are now predicting revenues of US$58.9m in 2024. If met, this would reflect a major 27% improvement in revenue compared to the last 12 months. Per-share losses are predicted to creep up to US$1.57. Before this latest report, the consensus had been expecting revenues of US$53.9m and US$1.70 per share in losses. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for both revenues and losses per share.

It will come as no surprise to learn thatthe analysts have increased their price target for Recursion Pharmaceuticals 5.4% to US$13.00on the back of these upgrades. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Recursion Pharmaceuticals, with the most bullish analyst valuing it at US$17.00 and the most bearish at US$10.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Recursion Pharmaceuticals' revenue growth is expected to slow, with the forecast 38% annualised growth rate until the end of 2024 being well below the historical 60% p.a. growth over the last three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 18% per year. Even after the forecast slowdown in growth, it seems obvious that Recursion Pharmaceuticals is also expected to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Recursion Pharmaceuticals going out to 2026, and you can see them free on our platform here..

Even so, be aware that Recursion Pharmaceuticals is showing 5 warning signs in our investment analysis , and 2 of those are significant...

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.