Recursion Pharmaceuticals (NASDAQ:RXRX) Shares Decline 5.3% After Disappointing Earnings Report

Shares of Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX) experienced a decline of 5.3% on Monday, impacted by an earnings report that fell below expectations. The stock was traded as low as $7.07 and ended the day at $7.11, with a total of 8,143,605 shares changing hands. This was a significant drop in volume, representing a 68% decrease from the average trading volume of 25,618,289 shares. The previous close before the earnings announcement was $7.51.

The company's earnings for the quarter were reported at ($0.53) per share, missing analysts' consensus estimate of ($0.36) by ($0.17). Recursion Pharmaceuticals noted a troubling negative net margin of 579.52% and a negative return on equity of 76.56%. The firm's revenue for the quarter stood at $4.60 million, which was starkly lower than analysts' expectations of $19.04 million. In comparison, the same quarter last year saw an earnings per share (EPS) of ($0.42), with a reported quarterly revenue decline of 57.8% year-on-year.

Analysts Adjust Price Targets

In light of the disappointing earnings, several analysts have reassessed their price targets for Recursion Pharmaceuticals. Leerink Partners reduced their price target from $7.00 to $6.00, assigning a "market perform" rating. Similarly, KeyCorp lowered their price target from $12.00 to $10.00 while maintaining an "overweight" rating. Cowen reiterated a "hold" rating, while Needham & Company LLC reaffirmed a "buy" rating with a price target of $11.00. Overall, three analysts currently rate the stock as a hold, while two have a buy rating. According to MarketBeat.com, the average analyst rating for Recursion Pharmaceuticals is currently "Hold," with an average price target of $8.25.

Institutional Investments Fluctuate

In recent months, several institutional investors have adjusted their holdings in Recursion Pharmaceuticals. Vanguard Group Inc. increased its stake by 40.1% in the fourth quarter, now owning 34,009,994 shares valued at approximately $229,908,000 after acquiring an additional 9,737,196 shares. ARK Investment Management LLC raised its position by 16.4% in the third quarter, now holding 32,769,186 shares worth about $215,949,000 after adding 4,626,268 shares. Furthermore, Softbank Group CORP. bought a new stake worth around $99,152,000 during the fourth quarter. State Street Corp also boosted its stake by 47.1% in the third quarter, with a current ownership of 12,870,272 shares valued at around $84,815,000 after acquiring an additional 4,120,685 shares. Overall, institutional investors own approximately 89.06% of Recursion Pharmaceuticals' stock.

Recursion Pharmaceuticals Stock Overview

The stock has a 50-day moving average of $7.72 and a 200-day moving average of $7.09. With a market capitalization of $2.76 billion, the company exhibits a price-to-earnings (P/E) ratio of -4.64 and a beta of 0.86. The firm maintains a debt-to-equity ratio of 0.04, along with both a quick and current ratio of 4.35.

About Recursion Pharmaceuticals

Recursion Pharmaceuticals operates as a clinical-stage biotechnology company. The firm focuses on utilizing technological innovations across fields such as biology, chemistry, automation, data science, and engineering to advance drug discovery. Current projects include REC-994, which is in Phase 2 trials aimed at treating cerebral cavernous malformation, REC-2282 in Phase 2/3 trials for neurofibromatosis type 2, REC-4881 in Phase 1b/2 for familial adenomatous polyposis, REC-3964 in Phase 1 trials targeting Clostridioides difficile infection, and REC-4881, again, in Phase 2 trials for cancers linked to AXIN1 or APC mutations.

Recursion, Pharmaceuticals, Earnings