Value
5.4/10data confidence 33%| Component | Sub-score |
|---|---|
| P/S | 0.0 |
| Analyst target | 9.0 |
RXRX · Why this verdict
Why Recursion Pharmaceuticals (RXRX) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score4.5/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Recursion Pharmaceuticals is an artificial intelligence-driven drug discovery company with analyst targets implying 102% upside and 3 of the last 4 quarters showing positive earnings surprises, but a confirmed death cross, 33% short interest, and near-zero quality scores reflect deep fundamental concerns about the pre-revenue business model.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Analysts maintain targets implying approximately 102% upside from the current price of $3.29, with a consensus sentiment reflecting belief that the company's artificial intelligence-based drug discovery platform represents a structural advantage in identifying novel drug candidates at scale. Sentiment breakdown | Analyst consensus price target remains above $6, at least 80% above the current price, over the next 12 months as platform partnership milestones sustain the bull case. | Tripped→Stable |
| CounterAI-based drug discovery is a pre-proof-of-concept technology at the clinical level; the 75.7% implied upside in analyst targets reflects speculative option value, and clinical trial failures could cause rapid and severe target price compression. | ||
The company beat earnings estimates in 3 of the last 4 quarters with an average positive surprise of approximately 9.4%, including a 33% beat in the February 2026 quarter, indicating losses are coming in less severe than analysts modeled. Earnings | EPS surprise remains positive in at least 2 of the next 4 quarters, indicating continued beat-versus-estimates pattern as the company manages its cash burn rate. | →Stable |
| CounterPositive EPS surprises in pre-revenue biotechs typically mean losses were smaller than feared rather than genuine profitability progress; the absolute loss per share of negative $0.22 still represents substantial ongoing cash consumption. | ||
A confirmed death cross with the 50-day moving average well below the 200-day and the 200-day declining at negative 7.8% per month represents one of the most severe downtrends in the group, indicating sustained institutional selling at the current price level. Momentum breakdown | The 200-day moving average slope declines by less than 2% per month within 6 months, indicating the downtrend is stabilizing ahead of a potential reversal. | ↓Deteriorating |
| CounterA moving average slope of negative 7.8% per month means the 200-day is declining rapidly, which historically requires a sustained period of price appreciation well above the 200-day level before slope turns positive, a long recovery path from $3.29. | ||
Short interest at 33% of float is among the highest in the universe covered, with a put-to-call ratio of 2.56 and implied volatility of 124%, indicating extremely high bearish positioning that could fuel a powerful short squeeze if positive clinical data emerges. Risk breakdown | Short interest falls below 20% within 12 months following a positive clinical milestone or partnership announcement that forces short sellers to cover. | ↑Improving |
| Counter33% short interest in a cash-burning pre-revenue biotech with a Piotroski score of 2 out of 9 likely reflects fundamental conviction among short sellers that the AI drug discovery model will not produce approved drugs on the timeline implied by the current valuation. | ||
Analysts maintain targets implying approximately 102% upside from the current price of $3.29, with a consensus sentiment reflecting belief that the company's artificial intelligence-based drug discovery platform represents a structural advantage in identifying novel drug candidates at scale.
Tripped→StableSentiment breakdown
- Expectation
- Analyst consensus price target remains above $6, at least 80% above the current price, over the next 12 months as platform partnership milestones sustain the bull case.
CounterAI-based drug discovery is a pre-proof-of-concept technology at the clinical level; the 75.7% implied upside in analyst targets reflects speculative option value, and clinical trial failures could cause rapid and severe target price compression.
The company beat earnings estimates in 3 of the last 4 quarters with an average positive surprise of approximately 9.4%, including a 33% beat in the February 2026 quarter, indicating losses are coming in less severe than analysts modeled.
→StableEarnings
- Expectation
- EPS surprise remains positive in at least 2 of the next 4 quarters, indicating continued beat-versus-estimates pattern as the company manages its cash burn rate.
CounterPositive EPS surprises in pre-revenue biotechs typically mean losses were smaller than feared rather than genuine profitability progress; the absolute loss per share of negative $0.22 still represents substantial ongoing cash consumption.
A confirmed death cross with the 50-day moving average well below the 200-day and the 200-day declining at negative 7.8% per month represents one of the most severe downtrends in the group, indicating sustained institutional selling at the current price level.
↓DeterioratingMomentum breakdown
- Expectation
- The 200-day moving average slope declines by less than 2% per month within 6 months, indicating the downtrend is stabilizing ahead of a potential reversal.
CounterA moving average slope of negative 7.8% per month means the 200-day is declining rapidly, which historically requires a sustained period of price appreciation well above the 200-day level before slope turns positive, a long recovery path from $3.29.
Short interest at 33% of float is among the highest in the universe covered, with a put-to-call ratio of 2.56 and implied volatility of 124%, indicating extremely high bearish positioning that could fuel a powerful short squeeze if positive clinical data emerges.
↑ImprovingRisk breakdown
- Expectation
- Short interest falls below 20% within 12 months following a positive clinical milestone or partnership announcement that forces short sellers to cover.
Counter33% short interest in a cash-burning pre-revenue biotech with a Piotroski score of 2 out of 9 likely reflects fundamental conviction among short sellers that the AI drug discovery model will not produce approved drugs on the timeline implied by the current valuation.
Per-dimension breakdown
Quality
1.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.0 |
| Gross margin | 0.0 |
| Net margin | 0.0 |
| Current ratio | 7.5 |
| FCF quality | 0.0 |
| Moat | 4.0 |
| Piotroski F | 3.3 |
- ▸Cash-burning: FCF -268% of revenue
- ▸No competitive moat
- ▸Weak Piotroski F-Score: 3/9
- ▸Quality concerns
Growth
5.0/10data confidence 50%Momentum
2.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.0 |
| MACD | 2.6 |
| OBV | 4.1 |
| MA position | 1.0 |
| Volume | 1.7 |
- ▸Capitulation risk (RSI 27, below 200MA)
- ▸Below 200-MA, MA slope -5.3%/30d — confirmed downtrend
Sentiment
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.6 |
| Price target | 10.0 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (6.0) — signal dampened
- ▸Analyst upside: 141%
Insider
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Modest insider selling — $889,888 (0.056% of mkt cap)
- ▸Institutions accumulating
Peer rank
2.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.2 |
| quality rank | 2.1 |
| growth rank | 1.7 |
Technical
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.0 |
| support resistance | 8.6 |
| 52w position | 0.0 |
| gap | 6.0 |
Risk (lower is worse)
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 0.1 |
| days to cover | 2.2 |
| volatility | 0.0 |
| put call | 10.0 |
| implied vol | 0.0 |
| beta | 7.0 |
| debt equity | 9.7 |
- ▸High short interest justified: 34%
- ▸High IV: 97%
Catalyst
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 7.2 |
- ▸Strong earnings: 3B/1M
- ▸Earnings in 12 days
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (5)
- ASYMMETRY:7.6>=1.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:2.5<4.5
- DEATH_CROSS:HARD_BLOCK
Warning (2)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
- EARNINGS_PROXIMITY:12d<=14d (soft)
Reward-to-Risk
7.63
Upside
+109.6%
Downside
14.4%
Sizing output
AVOID
SetupFalling Knife — Death cross, below all MAs, RSI 27, MACD bearish
EdgeCatalyst-Driven — Earnings in 12d with 3/4 beat streak
SuitabilitySpeculative — Drawdown -58% (>40% off 52w high), Binary industry: Biotechnology
Investment implication
The SELL_IF_HOLDING verdict reflects the MOMENTUM gate's 2.5<4.5 outcome against Sentiment at 7.3 and asymmetric R:R of 7.63.
The strongest dimensions are Sentiment at 7.3, Catalyst at 6.0, and Insider at 5.9; the weakest are Quality at 1.9, Momentum at 2.5, and Peer rank at 2.8. The V9 engine flagged 2 failed gates with 2 warnings, producing an asymmetric reward-to-risk of 7.63 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Analyst Upside And Ai Discovery PlatformTripped
Trip ifAnalyst consensus price target falls below $4, more than 30% below the current target of approximately $5.78, indicating widespread downgrade activity.
- P2Improving Earnings Surprise Trend
Trip ifEPS surprise falls below 0% in at least 3 of the next 4 quarters, indicating the improving beat pattern has reversed.
- P3Death Cross Confirmed Downtrend
Trip ifThe 200-day moving average slope worsens beyond negative 10% per month for more than 2 consecutive months, indicating the downtrend is accelerating.
- P433 Percent Short Interest Risk
Trip ifShort interest rises above 40% of float, more than 7 percentage points above the current 33%, indicating increased short conviction.