Today is shaping up negative for Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

Following the latest downgrade, Recursion Pharmaceuticals' nine analysts currently expect revenues in 2026 to be US$75m, approximately in line with the last 12 months. Losses are presumed to reduce, shrinking 15% per share from last year to US$1.04. Yet before this consensus update, the analysts had been forecasting revenues of US$85m and losses of US$0.94 per share in 2026. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

The consensus price target was broadly unchanged at US$6.57, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Recursion Pharmaceuticals' revenue growth is expected to slow, with the forecast 0.7% annualised growth rate until the end of 2026 being well below the historical 36% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 21% annually. Factoring in the forecast slowdown in growth, it seems obvious that Recursion Pharmaceuticals is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for this year. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on Recursion Pharmaceuticals after the downgrade.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Recursion Pharmaceuticals going out to 2028, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.

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.