Recursion Pharmaceuticals
RXRX
$3.83
+8.19%
Recursion Pharmaceuticals, Inc. is a clinical-stage biotechnology company that integrates biology, chemistry, automation, data science, and engineering to industrialize drug discovery, operating primarily in the United States with additional activities in the United Kingdom and other regions. The company positions itself as a tech-enabled drug discovery platform, distinct from traditional biotech peers through its proprietary AI-driven approach to decoding biology and identifying novel therapeutic candidates. The current investor narrative is dominated by the debate over whether Recursion's AI platform can translate into commercial success, with recent news highlighting comparisons to Moderna and skepticism about the unproven nature of its approach. Additionally, the stock has drawn attention from high-profile investors like Cathie Wood, though analysts remain divided on its speculative nature and path to profitability.…
RXRX
Recursion Pharmaceuticals
$3.83
Related headlines
Investment Opinion: Should I buy RXRX Today?
Based on the synthesis of data, the recommendation is a Hold with a speculative tilt. The core thesis is that Recursion's AI platform offers long-term disruptive potential, but the company's current financials are weak, with declining revenue and deep losses, and the valuation is rich. The analyst consensus average target of $7.22 implies significant upside, but the wide range ($4.00-$10.00) and lack of profitability warrant caution.
Supporting evidence includes the 88.5% upside to the average analyst target, a strong balance sheet with a current ratio of 5.50 and debt-to-equity of 0.069, and recent positive momentum with a 9.43% one-month gain. However, the PS ratio of 24.50 is well above the industry average, revenue declined 56.11% year-over-year in Q1 2026, and free cash flow is negative at -$325.847 million TTM. The company's profitability is deeply negative, with a net margin of -18.16% in Q1 2026.
The biggest risks are the binary nature of clinical outcomes, the need for additional financing, and the high valuation. The rating would upgrade to Buy if the company demonstrates revenue stabilization and progress in clinical trials, or if the stock price falls to a more attractive valuation (e.g., PS below 15x). It would downgrade to Sell if revenue continues to decline, cash burn accelerates, or clinical trials fail. Relative to its history, the PS ratio is near its low end, but compared to peers, it is still overvalued. The stock is fairly valued to slightly overvalued given the risks.
Sign up to view all
RXRX 12-Month Price Forecast
The outlook is balanced with significant upside potential if the AI platform proves successful, but substantial risks remain due to unproven technology and weak financials. The stock is likely to remain volatile, and the base case suggests a moderate recovery to around $7.22. Upgrades would come from positive clinical data or partnerships; downgrades from revenue misses or cash burn acceleration.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Recursion Pharmaceuticals's 12-month outlook, with a consensus price target around $7.22 and implied upside of +88.4% versus the current price.
Average Target
$7.22
0 analysts
Implied Upside
+88.4%
vs. current price
Analyst Count
—
covering this stock
Price Range
$4 - $10
Analyst target range
Six analysts cover Recursion Pharmaceuticals, with a consensus recommendation that is not explicitly stated but can be inferred from the distribution of ratings. The average target price is $7.22, which implies a 88.5% upside from the current price of $3.83. The target range is wide, from a low of $4.00 to a high of $10.00, indicating significant disagreement among analysts. The consensus leans bullish, with several Buy ratings from Needham and an Overweight from JP Morgan, but also Neutral ratings from B of A Securities and Morgan Stanley, suggesting a balanced view with a tilt towards optimism.
The high target of $10.00 assumes successful advancement of the pipeline, potential partnerships, and the validation of the AI platform, which could drive revenue growth and multiple expansion. The low target of $4.00, just 4.4% above the current price, prices in continued losses, dilution, and perhaps a failure to achieve key milestones. The wide spread of $6.00 between the low and high targets signals high uncertainty, which is typical for clinical-stage biotech with binary outcomes. Recent institutional ratings show a mix of reiterations, with JP Morgan upgrading from Neutral to Overweight in December 2025, while others have maintained their ratings. The lack of recent upgrades or downgrades suggests that analysts are in a wait-and-see mode, likely awaiting clinical data or partnership news to reassess their targets.
Drowning in data?
Find the real signal!
Bulls vs Bears: RXRX Investment Factors
The bear case currently has stronger evidence due to the company's deteriorating financials, including a 56.11% revenue decline and deeply negative margins, which contrast with its premium valuation. The bull case relies heavily on the potential of the AI platform and analyst optimism, but these are speculative and not yet reflected in financial performance. The most important tension is whether Recursion can stabilize revenue and demonstrate commercial validation of its platform before its cash runway depletes. If it fails to do so, the stock could face further downside; if it succeeds, the upside could be substantial.
Bullish
- Analyst target implies 88.5% upside: The average analyst target price is $7.22, which represents an 88.5% upside from the current price of $3.83. This suggests that the analyst community sees significant value in the stock despite its recent underperformance.
- Strong balance sheet with low leverage: The company has a current ratio of 5.50 and a debt-to-equity ratio of only 0.069, indicating ample short-term liquidity and minimal debt burden. With $659.984 million in cash, the company has a multi-year runway to fund operations without immediate financing needs.
- Recent momentum and relative strength: The stock has gained 9.43% in the past month and 18.58% in the past three months, outperforming the S&P 500 by 10.39% and 16.58% respectively. This recent strength could signal a trend reversal and attract momentum investors.
- High short interest could fuel a squeeze: The short ratio is 11.67, meaning it would take over 11 days for short sellers to cover their positions based on average volume. Any positive news could trigger a short squeeze, driving the stock sharply higher.
Bearish
- Revenue is highly volatile and declining: Q1 2026 revenue of $6.472 million represents a 56.11% year-over-year decline from Q1 2025. The revenue stream is lumpy, with a spike to $35.538 million in Q4 2025 followed by a sharp drop, making it difficult to forecast future performance.
- Deeply negative margins and profitability: The gross margin for Q1 2026 was -92.99%, meaning the cost of revenue exceeded revenue. The net loss was $117.504 million, and the operating margin was -19.86%, highlighting the company's inability to generate profits.
- Significant cash burn and dilution risk: Free cash flow was -$81.359 million in Q1 2026 and -$325.847 million on a trailing twelve-month basis. The company has relied on equity issuance, with $134.173 million in common stock issued in Q4 2025 and $254.460 million in Q3 2025, leading to dilution for existing shareholders.
- Premium valuation with no earnings support: The PS ratio is 24.50, significantly above the industry average of 5x-15x for clinical-stage biotech. The forward PE is -4.28, indicating no expected profitability soon, and the EV/Sales ratio of 25.81 is also high, leaving little room for error.
RXRX Technical Analysis
Recursion Pharmaceuticals is in a sustained downtrend over the past year, with a 1-year price change of -22.31%, significantly underperforming the S&P 500's +15.01% gain. The stock is trading at $3.83, which is 24.5% above its 52-week low of $2.77 but 46.7% below its 52-week high of $7.18, placing it in the lower half of its annual range. This positioning suggests the stock is in a recovery phase from its lows but remains far from its highs, indicating that while selling pressure may have abated, significant resistance lies overhead. The max drawdown of -58.17% underscores the severity of the prior decline, and the current price action reflects a market that is cautiously reevaluating the stock's prospects.
Recent momentum has turned positive, with a 1-month gain of 9.43% and a 3-month gain of 18.58%, both outpacing the S&P 500's -0.96% and +2.00% respectively. The 6-month change of +17.85% is roughly in line with the S&P 500's +17.44%, but the relative strength over 1-month and 3-month periods is +10.39% and +16.58%, indicating a sharp acceleration in short-term performance. This divergence from the longer-term downtrend could signal a trend reversal or a temporary mean-reversion rally, especially given the recent 8.19% single-day jump on September 18, 2026, which was accompanied by a volume of 43.95 million shares. The stock's beta of 1.071 suggests it is slightly more volatile than the market, but the recent price action implies idiosyncratic drivers are at play.
Key technical levels to watch include support at the 52-week low of $2.77, which if broken could trigger a resumption of the downtrend and target new lows. Resistance is at the 52-week high of $7.18, and a breakout above this level would require substantial fundamental catalysts and could signal a new bull phase. The current price of $3.83 is roughly midway between these extremes, but the recent momentum favors the bulls. The beta of 1.071 indicates that the stock is only about 7% more volatile than the market, but the biotech sector often exhibits higher volatility, so position sizing should account for potential sharp moves. The short ratio of 11.67 suggests that short sellers have significant exposure, and any positive news could trigger a short squeeze, adding to upside volatility.
Beta
1.07
1.07x market volatility
Max Drawdown
-58.2%
Largest decline past year
52-Week Range
$3-$7
Price range past year
Annual Return
-22.3%
Cumulative gain past year
| Period | RXRX Return | S&P 500 |
|---|---|---|
| 1m | +9.4% | -0.5% |
| 3m | +18.6% | +2.3% |
| 6m | +17.8% | +16.6% |
| 1y | -22.3% | +14.8% |
| ytd | -8.8% | +11.7% |
Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
RXRX Fundamental Analysis
Recursion's revenue trajectory is highly volatile and currently contracting, with Q1 2026 revenue of $6.472 million representing a 56.11% year-over-year decline from Q1 2025's $14.745 million. The most recent quarter's revenue was driven primarily by license and service revenue of $6.301 million, with grant revenue contributing only $171,000. This decline follows a spike in Q4 2025 revenue of $35.538 million, which was likely due to a one-time licensing deal, highlighting the lumpy and unpredictable nature of the company's revenue streams. The multi-quarter trend shows no consistent growth, with revenue fluctuating wildly from $5.175 million in Q3 2025 to $35.538 million in Q4 2025 and back down to $6.472 million in Q1 2026, making it difficult to forecast future performance.
Profitability remains deeply negative, with a net loss of $117.504 million in Q1 2026 and a net margin of -18.16%. The gross margin for Q1 2026 was -92.99%, meaning the cost of revenue exceeded revenue, a stark contrast to the positive gross margin of 24.37% in Q4 2025. This volatility in gross margin reflects the inconsistent revenue recognition and high fixed costs associated with the company's platform. The operating margin was -19.86% in Q1 2026, and the company's R&D expenses were $87.896 million, underscoring the heavy investment required to advance its pipeline. The net loss narrowed from $202.487 million in Q1 2025 to $117.504 million in Q1 2026, but the company remains far from profitability, and the path to positive earnings is uncertain.
Recursion's balance sheet shows a strong liquidity position with a current ratio of 5.50 and a debt-to-equity ratio of just 0.069, indicating low leverage and ample short-term liquidity. Cash at the end of Q1 2026 was $659.984 million, providing a runway of several years at the current burn rate. However, free cash flow remains negative, with -$81.359 million in Q1 2026 and a trailing twelve-month free cash flow of -$325.847 million. The company relies on external financing, as evidenced by $134.173 million in common stock issued in Q4 2025 and $254.460 million in Q3 2025, leading to dilution. The ROE of -57.01% and ROA of -27.33% reflect the significant losses relative to equity and assets, but the low debt burden mitigates immediate solvency risk.
Quarterly Revenue
$6472000.0B
2026-03
Revenue YoY Growth
-56.1%
YoY Comparison
Gross Margin
-93.0%
Latest Quarter
Free Cash Flow
$-325847000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
Open an Account, get $2 TSLA now!
Valuation Analysis: Is RXRX Overvalued?
Since Recursion's net income is negative (trailing twelve-month net loss), the PE ratio is not meaningful, and the PS ratio is the appropriate metric. The current PS ratio is 24.50, while the forward PE is -4.28, indicating that the company is not expected to be profitable in the near term. The PS ratio of 24.50 is high on an absolute basis, but the EV/Sales ratio of 25.81 provides a more comprehensive view, accounting for the company's debt and cash. The gap between trailing and forward metrics is not applicable for PE, but the negative forward PE suggests that analysts do not expect profitability soon, which is typical for clinical-stage biotech.
Compared to the biotechnology industry, Recursion's PS ratio of 24.50 is significantly above the industry average, which typically ranges from 5x to 15x for clinical-stage companies with similar risk profiles. The premium reflects the market's optimism about the company's AI platform and potential pipeline, but it also implies high expectations that may be difficult to meet. The PB ratio of 1.62 is relatively low, suggesting that the market values the company's assets at a modest premium, but this is less relevant for a company with negative earnings. The PEG ratio of 0.192 is not meaningful due to negative earnings growth, but it highlights the lack of earnings-based valuation support.
Historically, Recursion's PS ratio has been extremely volatile, ranging from a high of 2459.02 in Q2 2021 to a low of 24.50 currently. The current PS ratio is near the low end of its historical range, which could indicate a value opportunity if the company can stabilize revenue and grow. However, the decline in PS from over 1000 in 2021 to 24.50 today reflects the market's reassessment of the company's growth prospects and the dilution from stock issuance. The current valuation is more grounded than in the past, but it still prices in significant future success, and any disappointment could lead to further multiple compression.
PE
-2.8x
Latest Quarter
vs. Historical
N/A
5-Year PE Range 17x~59x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
-2.1x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks are significant. Recursion's revenue is highly volatile, with Q1 2026 revenue declining 56.11% year-over-year to $6.472 million, and gross margin turning negative at -92.99%. The company is burning cash rapidly, with free cash flow of -$81.359 million in Q1 2026 and -$325.847 million on a trailing twelve-month basis. Despite a strong cash position of $659.984 million, the company will likely need to raise additional capital, leading to dilution, as evidenced by $388.633 million in stock issued over the past two quarters.
Market and competitive risks are also pronounced. The stock trades at a PS ratio of 24.50, well above the industry average of 5x-15x, leaving it vulnerable to multiple compression if growth disappoints. The beta of 1.071 indicates it is slightly more volatile than the market, but biotech stocks often exhibit higher volatility. Recent news highlights skepticism about the AI platform, with comparisons to Moderna suggesting that Recursion's approach is unproven. Additionally, the high short ratio of 11.67 indicates that short sellers are betting against the stock, which could amplify downside moves if negative news emerges.
The worst-case scenario would involve clinical trial failures, inability to secure partnerships, and further revenue declines, leading to a cash crunch and massive dilution. In this scenario, the stock could retest its 52-week low of $2.77, representing a 27.7% decline from the current price of $3.83. The analyst low target of $4.00 is slightly above the current price, but if sentiment deteriorates, the stock could fall below that. The max drawdown of -58.17% over the past year shows the potential severity of a downturn. Investors could lose up to 27.7% in a bear case, and more if the company's fundamentals worsen significantly.
FAQ
The key risks include financial risks such as high cash burn (-$325.847 million TTM free cash flow) and the need for dilutive financing, operational risks like clinical trial failures, competitive risks from other AI drug discovery firms, and market risks such as high volatility (beta 1.071) and potential multiple compression. The most severe risk is the binary nature of clinical outcomes, which could lead to a sharp decline if key trials fail.
The 12-month forecast is neutral with a base case target of $5.00-$7.50 (50% probability), a bull case of $7.00-$10.00 (25% probability), and a bear case of $2.50-$4.00 (25% probability). The base case assumes revenue stabilization and no major setbacks, while the bull case requires successful clinical data and partnerships. The bear case reflects clinical failures and cash constraints.
RXRX appears overvalued based on traditional metrics, with a PS ratio of 24.50, well above the industry average of 5x-15x for clinical-stage biotech. The forward PE is negative, indicating no expected profitability. However, the PS ratio is near its historical low, suggesting that the market has already priced in significant risks. The valuation implies that investors are paying a premium for the potential of the AI platform, which may or may not materialize.
RXRX is a high-risk, high-reward investment that may be suitable for speculative investors with a high tolerance for volatility. The analyst average target of $7.22 implies 88.5% upside, but the company faces significant challenges, including a 56.11% revenue decline and negative gross margins. The stock's high short interest (short ratio 11.67) could lead to sharp moves in either direction. For those who believe in the AI platform's long-term potential, a small position could be justified, but it is not a safe bet for conservative portfolios.
RXRX is more suitable for long-term investment (minimum 3-5 years) for investors who believe in the AI platform's potential, as the path to profitability is likely years away. Short-term trading is highly risky due to volatility and binary events. The stock does not pay dividends, so returns depend entirely on capital appreciation. A long-term horizon allows time for clinical trials to read out and partnerships to develop.