AI driven webcast update puts Recursion Pharmaceuticals (RXRX) in focus

Recursion Pharmaceuticals (RXRX) drew fresh investor attention after a Morgan Stanley webcast highlighted how its mix of experimental biology and machine learning surfaced 25 drug targets at once, while speeding clinical trial enrollment and cutting development costs.

Despite the AI focused webcast, Recursion’s share price sits at US$3.73, with a 1 month share price return of 17.67% and a 1 year total shareholder return decline of 35.13%, suggesting that near term momentum contrasts with a weaker longer term record.

If this kind of AI driven drug discovery story interests you, it may be worth scanning other healthcare names in the Simply Wall St 35 healthcare AI stocks

With the shares at US$3.73, a value score of 2 and an estimated intrinsic discount of about 60%, investors now face a key question: is Recursion undervalued, or are markets already pricing in its future growth potential?

Most Popular Narrative: 89.3% Overvalued

Compared with the last close at $3.73, the most followed narrative implies a fair value of $1.97 per share, which is a much lower level and points to a very different view of what Recursion might be worth today.

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

Want to understand how a fair value well below the current price is built? The narrative leans heavily on aggressive margin assumptions, revenue expansion, and a future earnings multiple that resembles fast growing software names rather than typical early stage biotech.

Result: Fair Value of $1.97 (OVERVALUED)

However, several things could challenge that overvaluation call, including progress in clinical programs, as well as fresh interest following leadership changes and AI focused collaborations.

Another way of looking at value

That user narrative points to heavy downside, but our DCF model lands in a very different place. On Simply Wall St’s numbers, RXRX at $3.73 trades around 60% below an estimated fair value of $9.22. This frames today’s price as a possible discount rather than excess. Which story do you think fits the risk profile better?

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 61 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

The split sentiment around Recursion, with both risks and potential rewards in play, makes this a moment to move quickly and shape your own view with the 2 key rewards and 3 important warning signs.

Looking for more investment ideas?

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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.