Recursion Pharmaceuticals (RXRX) Following Its Tempus AI Deal And The Valuation Debate

Recursion Pharmaceuticals (RXRX) recently signed a two year RNA Foundation Model license with Tempus AI, giving Tempus global, oncology focused access to Recursion’s TxFM Model and delivering a US$12,000,000 non refundable fee.

Recent trading has been choppy for Recursion Pharmaceuticals. The 30 day share price return of 22.22% and 7 day gain of 4.63% suggest short term momentum is building. However, the 1 year total shareholder return has fallen 26.27% and the 5 year total shareholder return is down 79.65%. This points to a longer history of weak overall investor outcomes despite interest around agreements like the Tempus AI license.

Scan beyond Recursion Pharmaceuticals and see how other oncology focused AI players are setting up with the hand picked 35 healthcare AI stocks.

After a sharp move off the lows, yet with a share price of US$4.07 that still sits well below average analyst estimates near US$7.22, where does fair value for Recursion Pharmaceuticals genuinely land in that spread?

Most Popular Narrative: 107% Overvalued

Against the last close of $4.07, the most followed narrative on Recursion Pharmaceuticals pins fair value at $1.97, which indicates a very steep gap between the market price and that framework.

RXRX is a terrible biotech only because the INSIDERS themselves don’t believe in it! All they’re doing is milking the heck out of this doomed stock! Never seen a company where ALL they’re doing insiders are selling! Stock continues to go down every month! CEO said in 2014 that in 10 years there would be 100 new drugs! 12 years later they have ZERO 0️⃣!!! This stock went from over $40 to under $4! The hype is unbelievable! Worst biotech ever!!! Nuff said

See why 17 investors see Recursion Pharmaceuticals as 107% overvalued.

Result: Fair Value of $1.97 (OVERVALUED)

Still, Recursion Pharmaceuticals faces real swing factors, including ongoing losses of $518.884m and reliance on successful trial progress across its early stage pipeline.

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

Another View On Recursion Pharmaceuticals’ Value

That $1.97 fair value from the community narrative is harsh. Our DCF model points in the opposite direction, with an estimated future cash flow value of $9.52 per share. This frames RXRX as trading at a 57.2% discount. These are two very different stories, so which one do you lean toward?

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 28 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

Mixed messages around Recursion Pharmaceuticals can be confusing, so consider reviewing the underlying data, including the 2 key rewards and 3 important warning signs.

Looking for more investment ideas beyond Recursion Pharmaceuticals?

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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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