RECURSION PHARMACEUTICALS, INC. (RXRX): what the price assumes

In the published model solve dated 2026-Q2, anchored at $3.18, RECURSION PHARMACEUTICALS, INC. (RXRX) is priced for today's economics sustained for ~40.0 years+. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-28.

Generated: 2026-08-10 · Exported: 2026-08-12 · Source: https://boothcheck.com/report/RXRX

Headline

FieldValue
TickerRXRX
CompanyRECURSION PHARMACEUTICALS, INC.
Current price$3.18/sh
CompositionUnited States 53% / United Kingdom 47% / Other 0%

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basisrevenue-multiple
EV / sales paid16.7x
Steady-state operating margin assumed9.2%

Beyond 25%/yr sustained for 40 years; not resolvable as a revenue bet. The inversion reports a bound, not a solved point.

The company earns no operating profit yet; the inversion runs on the revenue multiple and an assumed steady-state margin.

Solve inputs: computed at a 15.6% cost of capital; growth searched up to the 25% self-funding ceiling.

Reconcile: at the x-ray's 9.3% required return this reads ~19.4 years; the models below use their own rates.

How unusual the bet is: n/a

ReferenceValue
vs own history-0.83σ
sustained it ~5 years at this level35%
implied end-window share0%

Valuation X-Ray

Every valuation family lands below the price. The price therefore sits beyond what those standard frames encode.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset1.73x2expensive
Earnings—0—
Relative6.36x2expensive
Growth5.26x2expensive

Families that call it expensive: Asset, Relative, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.9%); the inversion above states its own rate.

Per-Model Detail (n=6)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$0.00—noNegative/zero FCF — equity value floored at $0
DCF Exit MultipleGrowth$0.00—noNegative/zero FCF or EBITDA — equity value floored at $0
Relative ValuationRelative$0.506.36xyesP/S fallback (negative EPS): Sector P/S 4.0x × TTM revenue — excluded from consensus
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$1.941.64xyesBook value floor: BV/sh $1.94, ROE negative
Two-Stage Excess ReturnAsset$1.741.83xyesBook value with convergence: BV/sh $1.94, ROE converges to ke
Discounted Future Market CapGrowth$2.731.16xyesRev $0.1B, growth 30% (input: historical growth; tapered), Terminal P/S: 10.5x / 15.0x / 19.5x (bear / base = today's held flat / bull, cap 15x)
Peter Lynch Fair ValueRelative$0.00—noNegative/zero EPS — earnings-based value floored at $0
Margin TrajectoryGrowth$0.349.35xyesMargin ramp: -50% → 12% over 7yr, rev growth 30% (input: historical growth; tapered)
Earnings Power ValueEarnings——no—
Residual IncomeAsset——no—
Graham NumberAsset——no—
EV/EBITDA RelativeRelative——no—
FCF YieldEarnings——no—
SBC-Adj FCF YieldEarnings——no—
Ben Graham FormulaEarnings——no—
ROIC-Justified P/BAsset——no—
P/Sales SectorRelative$0.506.36xyesRevenue $0.07B × sector P/S 4.0x
PEG Fair ValueRelative——no—
Earnings YieldEarnings——no—
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Economic-Unit Decomposition (Sum Of The Parts)

Only one reportable economic unit is present in the current topology source. Consolidated operating lenses remain available, but there is no multi-unit decomposition.

UnitRoleValuation basisRevenueReported profitValue evidenceStatus
Recursion Pharmaceuticals (consolidated)operatingenterprise0.1B reported-currency—withheldunresolved no unit value

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

FieldValue
Net cash$636.1m
Interest coverage-354.3x
Share count CAGR (dilution)32.7%
Burning cashyes

Operating profit is negative or near zero and the company has no demonstrated through-cycle (mid-cycle) operating margin to normalize against, so years-to-repay cannot be computed honestly.

Bullet Takeaways

Bull Case

No standard valuation method reaches Recursion's price, and that is the correct starting point, because this is not a company to value on trailing financials. It is a bet on a platform. Recursion is trying to do something the pharmaceutical industry has wanted for decades: turn drug discovery from artisanal trial-and-error into an engineered, repeatable process, using automated biology experiments at scale and machine learning to find drug candidates faster and cheaper. If that works even partially, the value is not in today's $70 million of partnership revenue; it is in a discovery engine that can generate candidate after candidate at lower cost than the traditional model.

The combination with Exscientia is what gives the bet more shots on goal. The merger extended the cash runway into early 2028 and targets about $100 million in annual synergies, and the company expects roughly seven clinical readouts over the following 18 months across oncology and rare diseases. Seven readouts is a portfolio, not a single binary, which is the point of an industrialized platform: spread the risk across many programs so the failure of any one does not sink the thesis. The TUPELO data for REC-4881 was framed as the first clinical validation of the latest version of the platform, the kind of proof point the bull case needs.

The balance sheet buys the time to find out. Recursion holds about $636 million of cash against almost no debt, and it cut quarterly cash operating expense to $85.1 million in Q1 2026 from $120.2 million a year earlier, extending the runway without new financing into early 2028. Partnerships with large pharmaceutical companies provide non-dilutive milestone income and external validation of the platform. The bull case is simple to state and hard to underwrite: if the AI-discovery engine produces even one or two approvable drugs from this pipeline, the platform is worth a large multiple of today's price, and the company has the cash to reach the readouts that would prove it.

Bear Case

Recursion has no approved drug, no product revenue beyond partnership payments, and it loses hundreds of millions of dollars a year. That is the structural truth, and it has to lead, because every optimistic projection runs through a pipeline of candidates that have not yet proven they work in humans at the scale required for approval. The bear case is not that the platform will fail outright; it is that meaningful commercial success is years away in even a plausible scenario, and the price is being set as if the AI-discovery thesis is closer to proven than it is. The filing is direct that the candidates "may not be successful and may not receive regulatory approval or market acceptance."

The dilution is the second hard fact. The share count has grown about 33% a year, an enormous rate, because a pre-revenue company that burns cash funds itself by issuing stock and by merging with other cash-consuming companies. Even with the runway extended into early 2028, the math of a clinical-stage biotech is that more capital will eventually be needed, and each raise dilutes existing holders further. An investor buying today is buying a slice that the company's own financing needs are likely to keep shrinking. The filing also flags dependence on others for manufacturing and distribution, which can "adversely affect our future profit margins and our ability to commercialize any products that receive marketing approval."

The valuation sits at the most demanding end of the scale. With no operating profit, the price is read against sales at roughly 25 times revenue, a bound so extreme that no standard frame supports it; the methods that anchor on assets, peers, or forward growth all land below the price, and the book-value floor is near $1.94 per share. The asset-value methods are the only ones close, which tells you the cash on the balance sheet is doing much of the work holding the price up. The seven upcoming readouts are genuine catalysts, but they are also seven chances to disappoint, and clinical data in oncology and rare disease fails far more often than it succeeds. The bear does not need to call the platform a fraud; it only needs to note that a cash-burning, heavily diluting, pre-commercial company priced for a 40-year revenue runway has to deliver clinical wins on a schedule that history says is the exception, not the rule.

Valuation

Pinning a value on a pre-commercial company is inherently speculative, and this report does not try. The company is not earning a normal operating profit, so the price is read against sales, and at roughly 25 times revenue the implied path is extreme: it would require revenue growth beyond 25% a year sustained for decades and an eventual operating margin in the high single digits. That is a bound, not a solved number, and the engine flags the read as the most demanding end of the scale. The honest framing is that standard valuation arithmetic against trailing fundamentals is the wrong tool here; the price is an option on a platform, not a multiple of a business.

The methods confirm there is no value-method support near the price. No family reaches it: the relative and growth lenses land well below, and only the asset-value methods come close, anchored on a book value near $1.94 per share that is mostly the cash on the balance sheet. In other words, the part of the price the methods can justify is roughly the cash; the rest is the market paying for the discovery platform and the pipeline, which no standard frame can value because the candidates have not been approved. That is the correct way to read it, not as the model failing, but as the model isolating how much of the price is demonstrated value and how much is the bet.

Solvency here is about runway, not leverage. Recursion holds about $636 million of cash against almost no debt, but it is burning cash, with quarterly cash operating expense of $85.1 million in Q1 2026. On the current plan that funds the company into early 2028, which is the window in which the pipeline has to produce convincing clinical data. The share count growing about 33% a year is the cost of that runway. What a buyer underwrites at this price is not a discounted stream of profits; it is the probability-weighted value of an AI-discovery platform reaching commercial drugs before the cash and the patience run out.

Catalysts

The catalyst calendar is dense and clinical. Recursion expects roughly seven clinical readouts over 18 months following the Exscientia merger, spanning oncology and rare diseases, which turns the next year and a half into a series of binary events. The most advanced is REC-4881: the TUPELO trial data was presented as the first clinical validation of the latest platform version, the company plans to engage the FDA in the first half of 2026 on a registration pathway, and additional data is expected in early 2027. Earlier-stage assets including RBM39, CDK7, ENPP1, MALT1, and LSD1 carry safety, pharmacokinetic, or go/no-go decisions over the next 18 to 24 months.

The corporate catalyst already in hand is the Exscientia integration. The merger extended the cash runway into early 2028 and targets about $100 million in annual synergies, and Recursion cut quarterly cash operating expense to $85.1 million in Q1 2026 from $120.2 million a year earlier. Partnerships with large pharmaceutical companies remain a source of non-dilutive milestone income and validation.

What to watch is each clinical readout and the FDA interaction on REC-4881, because positive data on even one or two programs would reprice the platform thesis, while failures would erode it. Given the cash-burn profile, the runway into early 2028 is itself a clock: the pipeline has to produce convincing results inside that window. The next readout and the FDA pathway discussion are the near-term events that move the story.

Peer Cohorts (Per Segment, With Filing Citations)

Recursion Pharmaceuticals (consolidated) (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

Sources

Recursion Q1 2026 update, March 2026 · Recursion 2025 results, March 2026

View the full interactive RXRX report on boothcheck