Recursion Pharmaceuticals (RXRX) Up 6.5% Since Last Earnings Report: Can It Continue?

Core Viewpoint - Recursion Pharmaceuticals reported a narrower loss in Q3 2025 compared to expectations, but revenues significantly declined year-over-year, raising concerns about future performance and estimates [3][4][9]. Financial Performance - The company reported a loss of 36 cents per share in Q3 2025, which was better than the Zacks Consensus Estimate of a loss of 38 cents, but worse than the loss of 34 cents per share in the same quarter last year [3]. - Total revenues for the quarter were $5.2 million, a significant decrease from the previous year, primarily due to the absence of a $30 million milestone payment recognized in the prior year [4]. - Research and development (R&D) expenses increased by 62% to $121.1 million, attributed to the acquisition of full rights to REC-102 and the business combination with Exscientia [6]. - General and administrative (G&A) expenses rose by 10% to $41.6 million, influenced by the inclusion of expenses from the Exscientia business combination [7]. - Cash, cash equivalents, and restricted cash totaled $667.1 million as of September 30, 2025, an increase from $533.8 million as of June 30, 2025, expected to sustain operations through the end of 2027 [8]. Market Reaction and Estimates - Following the earnings release, there has been a downward trend in estimates, with the consensus estimate shifting down by 17.54% [9]. - The stock currently holds a Zacks Rank 3 (Hold), indicating an expectation of an in-line return in the coming months [11][12]. Industry Comparison - Recursion Pharmaceuticals operates within the Zacks Medical - Biomedical and Genetics industry, where competitor Krystal Biotech, Inc. has seen an 11% gain over the past month, reporting revenues of $97.8 million and an EPS of $2.66, reflecting a year-over-year increase of 16.7% [13][14].