Why Recursion’s latest earnings and capital plans matter

Recursion Pharmaceuticals (RXRX) just posted its fourth quarter and full year 2025 results, showing much higher quarterly sales and revenue alongside a smaller quarterly net loss, and paired those numbers with fresh equity offering plans.

The company reported fourth quarter sales of US$35.35 million and revenue of US$35.54 million, compared with US$4.51 million and US$4.55 million a year earlier, while quarterly net loss narrowed to US$108.12 million from US$178.91 million.

For the full year, sales reached US$74.26 million and revenue was US$74.68 million, versus US$58.49 million and US$58.84 million previously, with net loss widening to US$644.76 million even as basic loss per share moved to US$1.44 from US$1.69.

Alongside earnings, Recursion filed for a US$300 million at-the-market follow-on equity offering and a US$68.57 million shelf registration tied to 19,424,000 Class A shares for an ESOP-related offering, moves that can influence both funding flexibility and potential dilution for existing shareholders.

Recursion’s share price is US$3.64 after a 2.82% 1 day share price return. However, the 30 day share price return of 12.92% and 1 year total shareholder return of 44.68% show pressure on longer term holders. Recent earnings, the planned US$300 million at the market offering, the ESOP related shelf registration and the upcoming healthcare conference appearance together help explain why short term sentiment is still moving around as the market weighs funding needs against the company’s drug discovery ambitions.

If this update has you reassessing your exposure to AI driven drug discovery, it could be a good moment to scan our screener of 31 healthcare AI stocks.

With the share price well below recent analyst targets and long term returns under pressure, you have to ask yourself: is Recursion a mispriced AI drug discovery play, or is the market already assuming plenty of future growth?

Most Popular Narrative: 84.8% Overvalued

Compared with the last close at $3.64, the most followed narrative pegs Recursion’s fair value at $1.97, setting up a sharp valuation gap.

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 see how the same narrative jumps from extreme pessimism to long term optimism? The fair value call leans on aggressive revenue scaling and future margins that look very different to today. Curious what those assumptions imply for Recursion’s path from heavy losses to potential profitability? The full story joins those numbers to a bold long term view.

Result: Fair Value of $1.97 (OVERVALUED)

However, this hinges on Recursion turning heavy annual net losses of US$644.76 million and multiyear negative shareholder returns into a clearer path to sustainable economics.

Another valuation that points the other way

The user narrative says RXRX looks overvalued at a fair value of $1.97, but our DCF model lands in the opposite camp. On that approach, RXRX at $3.64 is trading 61.6% below an estimated future cash flow value of $9.47. Which story feels closer to how you see this business?

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 47 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

With sentiment split between skepticism and potential upside, this is a good moment to look at the numbers yourself and move quickly to form your own view. You can start with 2 key rewards and 2 important warning signs.

Ready for more investing angles to compare against RXRX?

If you are weighing what to do next after Recursion, do not stop here. A few minutes with the right stock lists could reshape your watchlist.

• Broaden your field of candidates with a curated set of under the radar value ideas using our screener containing 24 high quality undiscovered gems that line up on quality and fundamentals.
• Strengthen the defensive side of your portfolio by checking companies screened for solid finances through the solid balance sheet and fundamentals stocks screener (41 results) that can help anchor your risk.
• Focus on income and staying power with companies offering reliable payouts via our 14 dividend fortresses that may suit long term, cash focused investors.

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.