Recursion Pharmaceuticals (RXRX): How Recent Drug Development Moves and Investor Outreach Shape Valuation

Recursion Pharmaceuticals (RXRX) just made a $12.5 million equity payment to Rallybio in a move that caught the eye of many investors. This payment, designed to accelerate the development of the investigational ENPP1 inhibitor REV102 for hypophosphatasia, signals ongoing forward motion in their clinical pipeline. The company is also set to participate in two major investor conferences and just wrapped up a significant meeting organized by Needham. There is a lot happening in terms of both scientific progress and investor outreach.

These latest events arrive at a point when Recursion Pharmaceuticals’ stock has seen a mixed run. After a modest 6.5% jump on positive FDA news and key drug updates earlier in the year, the stock’s momentum has faded. Over the past month, RXRX is down 16%, underscoring that risk perception remains elevated. For the year, shares are off nearly 27%, and the three-year record shows a 54% decline. The company’s annual revenue has climbed 42% and it reports a strong balance sheet with ongoing R&D investments, even as profitability remains negative.

With so much action both in the lab and in the markets, is RXRX shaping up to be an undervalued play, or has the market already priced in its future breakthroughs and risks?

Most Popular Narrative: 25% Undervalued

According to the most widely followed narrative, Recursion Pharmaceuticals is undervalued by over 25% compared to its calculated fair value, driven by ambitious expectations for future growth and technology-powered transformation.

“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.”

Curious about the bold assumptions fueling this discounted valuation? Behind the scenes, there is a dramatic leap in projected sales, an ambitious turnaround in margins, and a sky-high future profit multiple that is rarely seen in biotech. Want a peek at the growth math pushing analyst targets above today’s price? Find out how this narrative connects AI breakthroughs and massive future revenues into one strikingly optimistic fair value.

Result: Fair Value of $6.47 (UNDERVALUED)

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

However, persistent cash burn and delays across the early-stage pipeline could quickly challenge the bullish outlook that is driving current analyst targets.

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

Another View: Price Ratios Tell a Different Story

While some see Recursion as undervalued based on its future growth, a look at its price-to-sales ratio compared to the industry average suggests the stock may actually be expensive. Could the market be right after all?

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 you have a different perspective or want to dig into the numbers yourself, you can craft your own assessment in just a few 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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