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David Jagielski, CPA, The Motley Fool
Mon, April 27, 2026 astatine 10:20 AM CDT 4 min read
If a banal has a marketplace headdress of astir $30 billion, you would astir apt expect its concern to beryllium good developed, generating important revenue, and apt profitable. But there's 1 banal trading astatine a valuation that not lone isn't profitable but besides isn't generating immoderate gross close now: Revolution Medicines (NASDAQ: RVMD).
In the past 12 months, its shares person skyrocketed much than 250%. It's been a blistery banal to own, adjacent though, from a cardinal approach, it doesn't look to person overmuch to backmost up its hefty valuation. And portion its valuation is incredibly high, it whitethorn not needfully beryllium each that ridiculous erstwhile you see the semipermanent maturation imaginable it possesses.
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Although the institution doesn't person an approved merchandise successful its portfolio conscionable yet, it's getting adjacent to that stage. Daraxonrasib is an breathtaking cause that has shown unthinkable imaginable successful treating pancreatic cancer. In a caller objective study, it appeared to importantly widen patients' lives. Those who took chemotherapy lived an mean of 6.7 months, whereas the median endurance for patients taking daraxonrasib was 13.2 months.
Analysts task that daraxonrasib's highest income could apical much than $7 billion. The institution besides has different crab drugs, zoldonrasib and elironrasib, which whitethorn make billions successful further revenue. Thus, its valuation whitethorn commencement to look overmuch much tenable fixed each that imaginable growth.
There's a batch of excitement astir Revolution Medicines' banal today, but the information is that investors whitethorn beryllium pricing successful excessively overmuch aboriginal maturation already. If you look astatine its imaginable gross being upwards of $10 cardinal oregon more, you whitethorn reason that astatine conscionable 3 times its aboriginal gross (or possibly adjacent less), it's not each that expensive.
But it could instrumentality galore years for the concern to get to the signifier wherever its gross becomes that large. And that isn't factoring successful what its nett volition beryllium like, however overmuch currency it mightiness beryllium burning through, and however galore shares it volition request to contented to facilitate its growth. Plus, there's besides the uncertainty astir whether each of its promising drugs volition get support and whether those rosy expert estimates volition beryllium to beryllium correct.
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