Successfully navigating the stock market requires patience and a long-term perspective. The key is to stick to a consistent plan and contribute regularly to your retirement accounts, allowing the power of compound interest to work its magic over time.
Still, there’s an undeniable allure in exploring the possibilities multibagger KK. There’s something alluring about companies with disruptive innovations whose stock has the potential to grow rapidly and deliver life-changing returns to shareholders.
recursion medicine(NASDAQ: RXRX) is a clinical-stage biotechnology with that level of potential. The company promises to revolutionize healthcare by applying artificial intelligence (AI) to drug discovery. Consider whether you can ultimately become a millionaire by buying stocks.
Recursion has quickly established itself as a leader in the AI-enabled biotechnology space. The company’s BioHive-2 supercomputer is Nvidia AI chips are one of the world’s most powerful accelerated computing systems.
advanced machine learning BioHive-2 analyzes vast amounts of biological data to identify drug targets, including proteins and genes involved in disease. Recursion’s operating system (OS) evaluates millions of compounds to identify potential drug candidates while predicting drug molecule properties and optimal patient populations to enhance drug design.
These efforts can accelerate research into treatments across a wide range of conditions while reducing costs compared to traditional methods.
Recursion’s main development this year was its merger with Exscientia, another biotech company focused on AI-based drug discovery. Exscientia’s expertise in advanced chemical design methods complements Recursion’s biology-driven approach. This combination created a vertically integrated platform, creating a fundamentally stronger company.
Image source: Getty Images.
The good news is that Recursion’s technology has already produced promising results and has a robust pipeline of drug candidates that incorporate Exscientia’s legacy programs.
One of the most promising prospects is REC-994, which could be the first oral therapy to treat symptomatic cerebral cavernous malformation (CCM), a brain hemorrhagic condition for which there is currently no approved treatment. There is sex.
REC-617 has also shown promising results, with a recent phase 1 interim study demonstrating positive patient responses and good tolerability in the treatment of advanced solid tumors. The company believes the drug has “best-in-class” potential, which is one of several reasons why Recursion is an interesting opportunity for investors.
Looking ahead to 2025, the market will closely monitor clinical results and regulatory updates as catalysts for recursion stocks.
Source: Recursion Pharmaceuticals.
It seems likely that at least one of Recursion Pharmaceuticals’ candidates will ultimately win approval as a novel treatment, turning the company into a commercially sustainable business over the next decade.
But making a more bullish case for the stock as an investment that grows many times over would be a much more difficult proposition. Perhaps Recursion will be needed to develop a blockbuster drug that can generate billions of dollars in sales over multiple years.
The reality is that Recursion is still years away from bringing a drug to market. Currently, the company receives limited revenue through partnership milestone payments and research grants, while facing significant increases in operating costs. Wall Street analysts expect financial losses to continue for the foreseeable future, with negative earnings per share (EPS) expected to worsen from an expected loss of $1.54 this year to $1.65 in 2025. are.
metric
2023
2024 (forecast)
2025 (forecast)
Revenue (in millions)
$44.6
$70.0
$76.0
Change in earnings (compared to previous year)
12%
57%
9%
Earnings per share (EPS)
($1.58)
($1.54)
($1.65)
EPS change rate (YoY)
Not applicable
Not applicable
Not applicable
Data source: Yahoo Finance. YOY = change from previous year.
While the market may overlook the lack of profitability based on long-term growth prospects, this dynamic could continue to weigh on stock prices. Recursion stock is down about 55% from its 52-week high, and any regulatory rollback could cause the stock to fall further.
Another consideration is the competitive industry environment. Major biotech companies, pharmaceutical companies, etc. Merck, AstraZenecaand pfizeramong other things, the increasing use of artificial intelligence in research and development processes. This widespread adoption raises the question of whether Recursion can maintain its technological edge in the field.
Recursion Pharmaceuticals has attractive potential, but without better visibility into its product approval path, I think it’s too early to buy this stock with confidence. I am. In the meantime, 2025 will be an important year for the company as it will make its long-term potential clearer. It’s always good to keep this in mind.
Before buying Recursion Pharmaceuticals stock, consider the following:
of Motley Fool Stock Advisor Our analyst team has identified what they believe Best 10 stocks Things investors can buy right now…and Recursion Pharmaceuticals wasn’t among them. These 10 stocks have the potential to generate impressive returns over the next few years.
when to think about it Nvidia This list was created on April 15, 2005…if you invested $1,000 at the time of recommendation. That’s $825,513!*
stock advisor We provide investors with an easy-to-understand blueprint for success, including guidance on portfolio construction, regular updates from analysts, and two new stocks every month. ofstock advisorFor the service more than 4 times The resurgence of the S&P 500 since 2002*.
Dan Victor has no position in any of the stocks mentioned. The Motley Fool has a position in Merck and Pfizer and recommends Merck and Pfizer. The Motley Fool recommends AstraZeneca. The Motley Fool has Disclosure policy.
