RXRX Stock Risk & Deep Value Analysis
Recursion Pharmaceuticals Inc
Healthcare • Biotechnology
DVR Score
out of 10
What You Need to Know About RXRX Stock
We analyzed Recursion Pharmaceuticals Inc using our deep value framework. Sign in to see our full verdict and DVR Score.
We ran RXRX through our deep value framework — analyzing financial health, distress signals, competitive moat, and risk factors. Our risk assessment: Aggressive investment. Here's what we found.
RXRX Risk Analysis & Red Flags
What Could Go Wrong
The company continues to burn substantial cash with deeply negative margins. If clinical milestones or partnership expansions do not materialize rapidly enough to offset the burn, significant future equity dilution will be required, severely impacting shareholder value and potentially leading to a sharp decline in stock price.
Risk Matrix
Overall
Aggressive investment
Financial
High
Market
Medium
Competitive
High
Execution
High
Regulatory
Medium
Red Flags
- ⚠
Persistent insider selling by non-CEO/CFO executives (Gibson, Borgeson) in the last 90 days, despite positive news.
- ⚠
Deeply negative gross margins and high cash burn with no clear timeline to profitability.
- ⚠
Significant reliance on future capital raises to fund operations and pipeline development.
- ⚠
Current market cap implies extremely ambitious future revenue and profitability, making it vulnerable to any execution setbacks.
Upcoming Risk Events
- 📅
Failure to meet Q1 2026 EPS consensus
- 📅
Negative or inconclusive results from FDA discussions for REC-4881
- 📅
Continued high cash burn requiring significant future dilution
When to Reconsider
- 🚪
Exit if quarterly cash burn significantly accelerates without a clear corresponding acceleration in pipeline progress.
- 🚪
Sell if REC-4881 (FAP) clinical program faces unexpected delays or negative FDA feedback.
- 🚪
Reconsider if additional rounds of insider selling become widespread across executive leadership.
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What Does Recursion Pharmaceuticals Inc (RXRX) Do?
Market Cap
$1.85B
Sector
Healthcare
Industry
Biotechnology
Employees
800
Recursion Pharmaceuticals, Inc. operates as a clinical-stage biotechnology company, engages in the decoding biology and chemistry by integrating technological innovations across biology, chemistry, automation, data science, and engineering to industrialize drug discovery in the United States. The company develops REC-994, which is in Phase 2 clinical trial to treat cerebral cavernous malformation; REC-2282, which is in Phase 2/3 clinical trial for the treatment of neurofibromatosis type 2; REC-4881, which is in Phase 1b/2 clinical trial to treat familial adenomatous polyposis; REC-3964, which is in Phase 1 clinical trial to treat Clostridioides difficile infection; and REC-4881, which is in Phase 2 clinical trial to treat AXIN1 or APC mutant cancers. Its preclinical stage product includes RBM39 to treat HR-proficient ovarian cancer. The company has collaboration and agreement with Bayer AG; the University of Utah Research Foundation; Ohio State Innovation Foundation; Roche & Genentech; and Takeda Pharmaceutical Company Limited. Recursion Pharmaceuticals, Inc. was incorporated in 2013 and is headquartered in Salt Lake City, Utah.
Visit Recursion Pharmaceuticals Inc WebsiteInvestment Thesis
Recursion Pharmaceuticals is a highly speculative, high-growth investment positioned to revolutionize drug discovery through its unique AI/ML-powered Biofoundry. Strategic partnerships with NVIDIA and Bayer, coupled with positive early clinical data (TUPELO), validate its platform's potential. Despite current unprofitability and high cash burn, successful progression of its pipeline and expansion of its 'drug-as-a-service' model could lead to exponential revenue growth and significant re-rating of its valuation.
Is RXRX Stock Undervalued?
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RXRX Price Targets & Strategy
12-Month Target
$7.20
Bull Case
$12.00
Bear Case
$2.50
Valuation Basis
Based on 35x forward P/S applied to estimated FY2027 revenue of $110M, leading to a projected market cap of $3.85B.
Entry Strategy
Dollar-cost average between $3.00-$3.50, building a position near recent support levels. Consider scaling in after Q1 2026 earnings for clearer financial trajectory.
Exit Strategy
Take partial profits at $7.00-$8.00 (analyst median target range) and $10.00+. Stop loss at $2.80 to limit downside, reflecting a break of recent lows.
Portfolio Allocation
5% for aggressive risk tolerance, given the early-stage nature and high potential.
Price Targets & Strategy
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Is RXRX Financially Healthy?
Profitability
Gross Margin
4.99%
Operating Margin
-880.85%
Net Margin
-863.35%
Return on Equity
-63.98%
Revenue Growth
26.92%
EPS
$-1.48
Balance Sheet
Current Ratio
5.50
Quick Ratio
5.42
Debt/Equity
0.02
Cash Flow
Free Cash Flow
-$387.80M
Other
Beta (Volatility)
1.08
Does RXRX Have a Competitive Moat?
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🛡️ Narrow
Moat Trend
Expanding
Moat Sources
3 Identified
The moat is strengthening as Recursion accumulates more proprietary data, refines its AI models, and deepens partnerships. The complexity and cost of replicating its integrated AI/wet-lab platform create a significant barrier, but the field is competitive.
Moat Erosion Risks
- •Rapid advancements by competitors in AI/ML for drug discovery.
- •Failure to translate AI-driven discoveries into commercially viable drugs.
- •Talent drain of key AI/ML scientists and drug developers.
RXRX Competitive Moat Analysis
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RXRX Market Intelligence
Sentiment & Insider Activity
Social Sentiment
Neutral to cautiously Bullish. Retail investors recognize the AI potential but are wary of biotech's inherent risks and cash burn.
Institutional Sentiment
Positive, highlighted by BlackRock's increased 7.2% stake, counterbalanced by overall analyst 'Hold' to 'Overweight' ratings and lack of recent widespread upgrades.
Insider Activity (Form 4)
Director Christopher Gibson sold 40,000 Class A shares on April 22, 2026 ($144,400). Blake C. Borgeson sold 220,000 shares on Feb 3, 2026 ($924,000) and 170,000 shares on Mar 3, 2026 ($588,200), with a planned 30,000 sale on Apr 7, 2026.
Options Flow
Normal options activity; no specific data indicating unusual institutional positioning available in current research.
Earnings Intelligence
Next Earnings
Expected May 11, 2026
Surprise Probability
Medium (Q4 2025 beat consensus, but financials remain challenging)
Historical Earnings Pattern
Historically, the stock has shown volatility around earnings, reacting to pipeline updates and partnership news more so than traditional profitability metrics, given its early-stage nature.
Key Metrics to Watch
Competitive Position
Top Competitor
BenevolentAI (BEN.L) or Insitro (private)
Market Share Trend
Gaining ground in the nascent AI drug discovery market through strategic partnerships and successful preclinical/early clinical validation.
Valuation vs Peers
Trading at a significant premium on a P/S basis compared to traditional biotech companies due to its AI platform. However, comparable pure-play AI drug discovery companies are rare or privately held, making direct comparisons difficult.
Competitive Advantages
- •Proprietary AI-driven 'Biofoundry' platform for drug discovery.
- •Strategic partnerships with industry leaders like NVIDIA and Bayer.
- •Extensive dataset for AI model training and drug candidate identification.
- •Rapid prototyping and testing capabilities.
Market Intelligence
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What Could Drive RXRX Stock Higher?
Near-Term (0-6 months)
- •Q1 2026 Earnings Report (expected May 11, 2026)
- •FDA discussions planned for REC-4881 (FAP) Phase 1b/2 TUPELO data (1H 2026)
- •Potential new strategic partnership announcements
Medium-Term (6-18 months)
- •Advancement of additional pipeline assets into clinical trials
- •Expansion of existing NVIDIA and Bayer partnerships
- •Key data readouts from ongoing clinical programs
Long-Term (18+ months)
- •Establishment as a leading AI-driven drug discovery platform
- •Disruption of traditional pharmaceutical R&D processes
- •Successful commercialization of internal drug candidates
Catalysts & Growth Drivers
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What's the Bull Case for RXRX?
- ✓
Acceleration in revenue growth and improving gross margin trends in future earnings reports.
- ✓
Successful progression of key pipeline assets through clinical trials, leading to more advanced phase readouts or regulatory approvals.
- ✓
Announcement of additional high-value strategic partnerships or licensing agreements.
Bull Case Analysis
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Competing with RXRX
See how Recursion Pharmaceuticals Inc compares to related companies
| Company | Market Cap | DVR Score | P/E | Revenue | Profit Margin | Rev Growth | |
|---|---|---|---|---|---|---|---|
Recursion Pharmaceuticals Inc RXRX | $1.9B | 7.3 | — | $35.5M | -863.4% | 26.9% | |
AbbVie Inc ABBV | $403.8B | 0.1 | 171.8 | — | — | — | Compare → |
Johnson & Johnson JNJ | — | 1.0 | — | — | — | — | Compare → |
Eli Lilly and Co LLY | $965.0B | 0.5 | 52.6 | — | — | — | Compare → |
Pfizer Inc PFE | $150.6B | 0.2 | 19.4 | $62.6B | 12.4% | -1.6% | Compare → |
UnitedHealth Group Inc UNH | $276.2B | 0.3 | 22.9 | $113.7B | 2.7% | 1181.0% | Compare → |
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How Recursion Pharmaceuticals Inc Makes Money
Recursion Pharmaceuticals uses an advanced, integrated AI and machine learning platform, called a 'Biofoundry,' to discover and develop new drugs more efficiently and rapidly than traditional methods. They generate vast amounts of biological and chemical data, which their AI models analyze to identify potential drug candidates for various diseases. They make money through two primary avenues: collaborating with larger pharmaceutical companies (like Bayer) to accelerate their partners' drug discovery pipelines and by developing their own internal portfolio of drug candidates that they hope to bring to market or out-license, earning milestone payments and future royalties.
Read Full Business Model BreakdownFAQ
What is the DVR Score for Recursion Pharmaceuticals Inc (RXRX)?
As of April 27, 2026, Recursion Pharmaceuticals Inc has a DVR Score of 7.3 out of 10, placing it in the "Solid Pick" category. This score is generated by our AI-powered deep value analysis framework that evaluates growth potential, financial health, competitive moat, and risk factors.
What is the market capitalization of Recursion Pharmaceuticals Inc?
Recursion Pharmaceuticals Inc's market capitalization is approximately $1.9B. The company operates in the Healthcare sector within the Biotechnology industry.
What ticker symbol does Recursion Pharmaceuticals Inc use?
RXRX is the ticker symbol for Recursion Pharmaceuticals Inc. The company trades on the NMS.
What is the risk level for RXRX stock?
Our analysis rates Recursion Pharmaceuticals Inc's overall risk as Aggressive investment. This assessment considers execution risk, market risk, financial risk, competitive risk, and regulatory risk. For a full breakdown, see the risk analysis section above.
Is Recursion Pharmaceuticals Inc's revenue growing?
Recursion Pharmaceuticals Inc has reported revenue growth of 26.9%. The company is showing strong top-line momentum.
Is RXRX stock profitable?
Recursion Pharmaceuticals Inc has a profit margin of -863.4%. The company is currently unprofitable.
How often is the RXRX DVR analysis updated?
Our AI-powered analysis of Recursion Pharmaceuticals Inc is refreshed regularly to incorporate the latest financial data, market conditions, and news. The most recent update was on April 27, 2026.
Important Disclaimer – Not Financial Advice
Deep Value Reports is an independent research platform for educational and informational purposes only. We are not financial advisors, investment advisors, or licensed professionals. The analysis, scores, and information provided on this page for RXRX (Recursion Pharmaceuticals Inc) should not be construed as personalized investment advice, a recommendation to buy or sell any security, or an offer to provide investment advisory services.
All investments involve risk, including the potential loss of principal. Past performance does not guarantee future results. Always conduct your own research, consider your financial situation, and consult with a qualified financial advisor before making any investment decisions.