QS Research · Michael Burry's Scion Capital analyst template · 2006
Revolution Medicines, Inc. (RVMD)
As of 2026-11-08 · 12/15 boxes filled from SEC filings and market data
Conclusion: SHORT
Conviction medium · base case -88% · downside -91% · upside -85%
The market is capitalizing a first-five-weeks launch as if RASONQUE already earns $2.6B of TTM revenue: at $192.28 the EV is $37.94B (N21) on $197.6M TTM revenue (N10), or 192.03x EV/Sales (N22), versus the 2.03x-14.38x peer range (S1). I use TTM revenue as the base and re-rate to that range only because the Q3 2026 filing/guidance says the $197.559M was five weeks of sales with channel stocking and EAP transitions and is not a run-rate (S29, S31, S102); normalized earnings are not available, since FY2020-FY2025 operating income and cash flow were negative every year (S24). Base case: 8.205x x $197.6M = $1.62B EV + $3.65B cash - $151.2M leases = $5.12B equity / 216.29M shares = $23.67, -87.7% (N10, N18, N19, N5). Downside: 2.03x gives $18.03 (-90.6%); upside: 14.38x gives $29.31 (-84.8%), so even the high peer multiple is far below today's price and the short rule is met; the risk is binary launch/trial news and 6.0% short interest (N27).
Key numbers
- Share price: $192.28
- Market cap: $41.59B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $197.6M
- Price / book: 17.32x
The 15 boxes
- ✓ 1. Long-form business notes
RVMD is a clinical-stage precision oncology company that earns no product revenue: revenue went $43.0M (FY2020) → $29.4M (FY2021) → $35.4M (FY2022) → $11.6M (FY2023) → $0 (FY2024) → $0 (FY2025), a -100% drop FY2023 to FY2024 that has not reversed. Every one of the six fiscal years in the DATA table shows negative operating income, negative pre-tax income and negative net income to common, so there are no positive earnings to normalize; the FY2025 operating loss was -$1.18B against operating cash flow of -$897.7M. Between the FY2020 and FY2025 10-Ks the business changed from a RAS Companion Inhibitor portfolio (SHP2 RMC-4630 run with Sanofi, mTORC1 RMC-5552, SOS1 RMC-5845) plus preclinical RAS(ON) compounds, to a RAS(ON)-only clinical portfolio (daraxonrasib, zoldonrasib, elironrasib, RMC-5127) running four Phase 3 PDAC trials and one Phase 3 NSCLC trial. Cash and short-term investments on the FY2025 balance sheet were $383.7M and $1.64B respectively; funding has come from equity issuance, with diluted shares rising from 54.87M (FY2020) to 190.13M (FY2025).
- ✓ 2. Competitive advantage
No durable advantage is shown in these sources. RVMD has never booked product revenue — revenue was $0 in both FY2024 and FY2025 (from $11.6M in FY2023) — and operating losses widened every year to -$1.18B in FY2025, so there is no gross margin or return history to point to. The only edge the 10-K claims is an unmeasured belief in its "discovery programs, technology, knowledge, experience and scientific resources", against dozens of named KRAS G12C, G12D, G12V and pan-RAS competitors, many with greater financial resources. The quasi-moat items are patents, breakthrough therapy designations and a CNPV voucher, none of which the sources tie to pricing power or margins.
- ✓ 3. 10-Q takeaways
Q3 2026 was the first revenue quarter: RASONQUE net product revenue was $197.559M for the three and nine months ended Sep 30, 2026 versus zero in the prior-year periods, but it included initial channel stocking and EAP transitions and only about five weeks of U.S. commercial availability. Reported cost of sales was just $0.327M because pre-approval inventory had zero book cost; the 10-Q says capitalizing those costs would have added $1.8M. The quarter was still deeply loss-making—operating loss $(373.149)M and net loss $(407.457)M, including a $40.702M non-cash warrant fair-value charge—with $3.7B of cash, cash equivalents and marketable securities at Sep 30, 2026. No TTM column is presented; the 10-Q says no product revenue occurred before Q3 2026.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
Sign in with a QuantSignals Premium or Gold plan to read every box: each point linked to the SEC filing it came from, the bull and bear case, and the comparables. QS Research powers the signals behind FST, our autonomous trading agent.