Is Recursion Pharmaceuticals Stock a Millionaire Maker?

Looking ahead to 2025, the market will closely monitor clinical data and regulatory updates as catalysts for Recursion shares:

It seems likely that at least one of Recursion Pharmaceuticals’ candidates will eventually win approval as a new treatment, turning the company into a commercially sustainable operation within the next decade.

But making a much more bullish case for the stock as an investment that will multiply many times over would be a much more compelling proposition. Presumably Recursion will need to develop a blockbuster drug that could generate billions of dollars in sales over several years.

The truth is that Recursion is still years away from bringing a drug to market. Currently, the company faces significantly higher operating expenses while generating only limited revenue through partnership milestone payments and research grants. Wall Street analysts predict financial losses will continue for the foreseeable future; Negative earnings per share (EPS) are expected to worsen from a projected loss of $1.54 this year to $1.65 in 2025.

Data source: Yahoo Finance. YOY = year over year.

While the market may ignore the lack of profitability based on long-term growth expectations, the dynamic could keep the stock under pressure. Shares of Recursion are down nearly 55% from their 52-week high, and any regulatory disruption could send the stock lower further.

Another thing to consider is the highly competitive industry environment. Major biotechnology and pharmaceutical companies Merck, AstraZenecaAnd Pfizeramong others, are increasingly using artificial intelligence in their research and development processes. This widespread adoption raises questions about whether Recursion can maintain a technological advantage in this space.

Although Recursion Pharmaceuticals presents compelling possibilities, I believe it is too early to buy this stock with conviction until we have a better view of the product approval path. Meanwhile, 2025 will be a crucial year for the company to gain greater clarity on its long-term potential. You may want to keep this on your radar.

Before buying shares in Recursion Pharmaceuticals, consider:

Motley Fool Stock Advisor The analyst team just determined what they believe to be Top 10 stocks for investors to buy now… and Recursion Pharmaceuticals wasn’t one of them. The 10 stocks that made the cut could deliver monster returns in the coming years.

Think about when Nvidia You made this list on April 15, 2005… if you invested $1,000 on the date we recommended, You would have $825,513!*

Stock Advisor provides investors with an easy-to-follow success plan, including guidance on portfolio construction, regular updates from analysts, and two new stock picks each month. Stock Advisor there is service more than four times Return of the S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns as of December 16, 2024

And Victor It has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Merck and Pfizer. The Motley Fool recommends AstraZeneca Plc. The Motley Fool has a feature disclosure policy.

Is Recursion Pharmaceuticals Stock a Millionaire Maker? originally published by The Motley Fool