Recursion Pharmaceuticals (RXRX): Assessing Valuation Following CEO Appointment and Disappointing Earnings Results

Recursion Pharmaceuticals (RXRX) just announced a leadership shift, with Najat Khan set to become CEO starting January 2026. The company also reported weaker quarterly earnings with lower revenue and deeper losses than last year. These developments are getting close investor attention.

See our latest analysis for Recursion Pharmaceuticals.

It has been a tough stretch for Recursion Pharmaceuticals, as the recent CEO transition and disappointing quarterly results have contributed to fading momentum. The stock’s share price return is now down 35.5% year to date, and total shareholder return sits at -36.5% over the past year, reflecting growing caution among investors about near-term growth prospects.

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Given the combination of steep recent losses and a sizeable discount to analyst price targets, investors are left to consider whether Recursion is now undervalued or if the market has already priced in future challenges. Could this turbulence present a buying chance, or is the company’s slow growth outlook already reflected in its share price?

Most Popular Narrative: 26.2% Undervalued

With Recursion Pharmaceuticals’ fair value estimate sitting at $6.30 and the last closing price at $4.65, market sentiment is trailing well behind what analysts believe the stock is worth, signaling a notable value gap worth attention.

Rapid integration and iterative improvement of the Recursion OS 2.0 platform, incorporating advanced AI and ML tools (such as Boltz-2 and causal AI for clinical trial design), are expected to drive faster, more cost-effective drug discovery and development, improving R&D efficiency and supporting long-term margin expansion.

Read the complete narrative.

Wondering what drives analysts to such a bullish outlook? The full narrative reveals the hidden assumptions, such as aggressive new tech integration, optimistic revenue maps, and bold targets on margins. But which of these ambitious forecasts really move the valuation needle?

Result: Fair Value of $6.30 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing reliance on pharma partners and the early-stage nature of Recursion’s pipeline could quickly alter the bullish outlook if challenges emerge.

Find out about the key risks to this Recursion Pharmaceuticals narrative.

Another View: What Does the SWS DCF Model Say?

Looking from a different perspective, our SWS DCF model points to a fair value of $4.41, which is actually below the current share price. This suggests Recursion may not be as undervalued as the analyst consensus implies. How much should investors trust consensus optimism compared to cash flow models?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Recursion Pharmaceuticals for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 865 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Recursion Pharmaceuticals Narrative

If you see things differently or want to dive deeper, you can quickly piece together your own interpretation and see how it stacks up. Do it your way

A great starting point for your Recursion Pharmaceuticals research is our analysis highlighting 1 key reward and 3 important warning signs that could impact your investment decision.

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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.

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