Recursion Pharmaceuticals (RXRX): Evaluating Valuation Following Milestone Payment and New AI/Pipeline Developments

Recursion Pharmaceuticals (RXRX) just grabbed attention with a $12.5 million milestone payment from Rallybio as its investigational ENPP1 inhibitor, REV102, advances in the clinic. This event is more than a revenue boost; it reinforces Recursion’s momentum in rare disease drug development. With the company’s launch of Boltz-2, its newest AI model built alongside MIT, and the recent merger with Exscientia, Recursion is doubling down on technology-driven discovery efforts that may change the pace of innovation in biotech.

This stream of news has investors weighing how much progress is already reflected in Recursion’s share price. The company has enjoyed bursts of optimism over the past year as it deepens its AI expertise. Yet the stock has drifted down nearly 30% over the past year and more than 55% over the past three years, suggesting that the market is still waiting for results to catch up with promise. The latest milestone payment and partnership developments may shift sentiment, but so far, momentum is still searching for a clear direction.

With Recursion mixing clinical progress and expanding AI partnerships, some investors may be assessing whether the market is already pricing in the company’s next phase of growth.

Most Popular Narrative: 25.6% Undervalued

According to the most widely followed narrative, Recursion Pharmaceuticals is currently trading well below its calculated fair value. This suggests significant room for future upside if key drivers play out.

Increasing digitization and utilization of large, proprietary, multimodal biological and patient datasets (such as phenomaps and multi-omic data) enables Recursion to strengthen its competitive position and become more attractive to big pharma partners. This could support potential growth in collaboration revenue and gross profit.

Curious what expectations power this bold undervaluation? The narrative hinges on aggressive growth predictions, eye-catching profit margins, and a future multiple you might expect from a market dominator. Want to know what numbers analysts are betting on and why their forecast is so bullish? Discover the details fueling this fair value estimate.

Result: Fair Value of $6.47 (UNDERVALUED)

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

However, persistent dependence on pharmaceutical partners and the high risk of delays in clinical trials could quickly undermine confidence in this optimistic scenario.

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

Another View: Price Ratios Tell a Different Story

On the other hand, if you look at the company's market value relative to its sales, Recursion appears expensive compared to the broader biotech sector. Does this mean the optimism is running ahead of reality?

See what the numbers say about this price — find out in our valuation breakdown.

Stay updated when valuation signals shift by adding Recursion Pharmaceuticals to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own Recursion Pharmaceuticals Narrative

If the presented viewpoint does not quite resonate with you, or you prefer hands-on analysis, you can craft your own narrative in just minutes. Do it your way.

A great starting point for your Recursion Pharmaceuticals research is our analysis highlighting 2 key rewards and 2 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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