If you are wondering whether Revolution Medicines is still worth considering after its recent run, this article will walk through what the current share price might be implying about its value.
The stock last closed at US$118.64, with returns of 50.1% over the past week, 51.1% over the past month, 50.1% year to date, 184.0% over one year, 294.3% over three years and 191.0% over five years, which has clearly changed how the market is pricing its prospects and risks.
Recent coverage around Revolution Medicines has focused on its position in pharmaceuticals and biotech, as well as how investors are reacting to that story in the share price. Together, these updates help explain why recent returns have been so strong and why the valuation now deserves closer attention.
On our checks, Revolution Medicines has a valuation score of 3 out of 6. We will break this down using several common valuation approaches before finishing with a more complete way of thinking about the company’s value.
A Discounted Cash Flow, or DCF, model estimates what a company might be worth today by projecting its future cash flows and discounting them back to a present value.
For Revolution Medicines, the model used is a 2 Stage Free Cash Flow to Equity approach, based on cash flow projections in $. The latest twelve month free cash flow is a loss of $777.08 million. Analyst and extrapolated estimates point to free cash flow of $895.57 million in 2030, with a path that includes several years of projected cash outflows before the company moves into positive territory.
Simply Wall St aggregates these yearly projections, discounts them, and arrives at an estimated intrinsic value of about $370.72 per share. Compared with the recent share price of $118.64, the model output suggests the stock is about 68.0% undervalued on this set of assumptions.
This is a model based on long term cash flow forecasts, so it is a useful reference point rather than a precise answer.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Revolution Medicines is undervalued by 68.0%. Track this in your watchlist or portfolio, or discover 879 more undervalued stocks based on cash flows.
RVMD Discounted Cash Flow as at Jan 2026
For companies that are not yet profitable, book value can be a useful anchor because it focuses on the net assets supporting the business rather than earnings that may still be volatile or negative. Investors often look at the price to book, or P/B, ratio to see how much they are paying for each dollar of those net assets.
Story Continues
What counts as a “fair” P/B ratio usually reflects how the market views a company’s growth potential and risk profile. Higher expected growth and lower perceived risk can justify a higher multiple, while lower growth or higher risk often point to a lower one.
Revolution Medicines currently trades on a P/B of 14.36x, compared with about 2.70x for the broader Biotechs industry and 24.50x for its peer group. Simply Wall St also uses a proprietary “Fair Ratio” model, which estimates the P/B you might expect for a company after considering factors like earnings growth, profit margins, market cap, risks and its industry. This tends to be more tailored than a simple comparison against peers or an industry average, which can miss important differences between companies.
There is no Fair Ratio provided here, so on this metric alone the stock cannot be clearly classified as overvalued or undervalued.
Result: ABOUT RIGHT
NasdaqGS:RVMD P/B Ratio as at Jan 2026
P/B ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1444 companies where insiders are betting big on explosive growth.
Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple way to connect your view of a company with the numbers behind it. A Narrative is your story about Revolution Medicines, where you spell out what you think could happen to its revenue, earnings and margins, then link that to a forecast and a fair value. On Simply Wall St, millions of investors do this on the Community page, using Narratives as an easy tool to compare their own fair value with the current share price and decide whether they see a potential buying or selling opportunity. The key benefit is that Narratives update automatically when new information arrives, such as fresh earnings or news, so your story and valuation stay current without extra work from you. For Revolution Medicines, for example, one investor might see a conservative outlook and set a lower fair value, while another builds a more optimistic Narrative that supports a higher fair value.
Do you think there’s more to the story for Revolution Medicines? Head over to our Community to see what others are saying!
NasdaqGS:RVMD 1-Year Stock Price Chart
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include RVMD.
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