QS Research · Michael Burry's Scion Capital analyst template · 2006
Revolution Medicines, Inc. (RVMD)
As of 2026-11-06 · 12/15 boxes filled from SEC filings and market data
Conclusion: SHORT
Conviction high · base case -89% · downside -91% · upside -87%
RVMD has no positive cycle-normalized earnings to value: FY2025 revenue was $0 with a -$1.18B operating loss, and even the new TTM base has $197.6M revenue against -$1.69B EBIT and -$1.44B FCF. Using section 13's TTM revenue base, a midpoint 5.63x EV/Sales gives $1.112B EV + $3.65B cash - $151.2M leases = $4.61B equity / 216.29M shares = $21.32, or -88.9% versus $192.28; the downside 1.78x is $17.80 (-90.7%) and upside 9.48x is $24.84 (-87.1%). Even the outer 14.49x bound is $29.41, -84.7%. The market is not missing the launch; it is capitalizing peak-sales optionality at 192.03x TTM revenue while Q3 revenue was five weeks plus channel fill and the company still burns cash. The verdict is short: base <= -30% and upside <= +25%, with all three cases pointing the same way.
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 with no product revenue: revenue went $11.6M in FY2023 to $0 in FY2024 and $0 in FY2025, so there is no positive earnings cycle to normalize — the six years in the data show only a widening operating loss, from -$110.7M in FY2020 to -$1.18B in FY2025. Cash is consumed, not generated: operating cash flow was -$897.7M in FY2025 against $383.7M of cash at 2025-12-31. The value therefore rests on the RAS(ON) pipeline (daraxonrasib, zoldonrasib, elironrasib, RMC-5127) and its Phase 3 readouts, not on any current revenue stream. No TTM or quarterly figures are in the sources, so TTM cannot be shown beside the annual series.
- ✓ 2. Competitive advantage
No durable competitive advantage is visible in the numbers. FY2024 and FY2025 revenue were $0 and the last real revenue (FY2023 $11.6M) was Sanofi collaboration money that ended in June 2023, so there is no product, no pricing power, no installed base and no switching cost to defend. Operating losses widened every year to -$1.18B in FY2025 with operating cash flow of -$897.7M, meaning the franchise has been financed by equity issuance, the EQRx acquisition and the Royalty Purchase Agreement rather than by returns on capital. The company asserts discovery-platform advantages in its 10-K but gives no margin or return evidence for them, and it names dozens of KRAS G12C/G12D/G12V and pan-RAS competitors, many with greater resources.
- ✓ 3. 10-Q takeaways
The Q3 2026 10-Q (quarter ended 2026-09-30, filed 2026-11-04) is the first report with product revenue: $197.6 million of net RASONQUE revenue in both the three and nine months ended September 30, 2026, all of it from a launch that began in August 2026 and partly from initial channel stocking, so it is a partial-quarter number, not a run rate. Cost of sales was only $0.3 million because launch inventory was expensed to R&D pre-approval (a zero-cost basis), so reported gross margin is meaningless as an economic margin; it would have been $1.8 million higher on a capitalized basis. Operations remain deeply loss-making: operating loss $(373.1) million in Q3 2026 and $(1,323.5) million for nine months 2026, with net loss $(407.5) million / $(1,505.6) million including a $(207.5) million nine-month warrant mark. There is no annual or TTM series in these sources, so no cycle-normalized earnings can be built from them; the only balance-sheet anchor is $3.7 billion of cash and securities at 2026-09-30 against a $4.4 billion accumulated deficit.
- ✓ 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.
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