Exelixis Returned 46% On A Case The Market Still Has Not Settled

If you had bought Exelixis on 2 October 2025, you now know exactly how that call treated your portfolio. For Exelixis shareholders, the return over the past year was 45.6%, including dividends. The result invites a harder look at what early buyers were weighing when analysts were split between expanding global oncology markets, pressure from 340B discounts, and drug pricing scrutiny. Was the bigger swing factor future zanzalintinib approvals, or the risk of cabozantinib concentration?

Narratives are how investors here put a case on the record, with explicit assumptions about revenue, margins and the multiple. Those assumptions imply an estimated Fair Value.

The easy part of this move is behind Exelixis. Zero in on 31 high quality undervalued stocks for companies trading below our estimates.

The Argument Exelixis Investors Were Really Having

At the start of the period, Exelixis shares cost US$41.35, and buyers were weighing two very different stories about where the oncology specialist might head next.

The bullish narrative put fair value at US$44.06, based on assumptions that revenue would compound at 11.7% and profit margins would rise to 36.7% over three years as CABOMETYX uptake and zanzalintinib prospects broadened the business.

The bearish case anchored fair value at US$36.00, focused on the risk that rising 340B volume and tighter drug pricing would compress margins while cabozantinib dependence left earnings exposed.

What The Evidence Around Exelixis Actually Showed

Exelixis delivered Q2 2026 revenue of US$628.69 million and net income of US$212.05 million, with net margin rising from 32.5% to 33.7%. That supported the optimistic case that profitability could expand. FDA review delays for zanzalintinib and mixed STELLAR-303 subgroup data pushed against the clean pipeline story. Overall, the evidence cut both ways.

The main assumption that got tested was margin durability in the face of concentration and discounts. For any other biotech, you would track net margin alongside product mix by franchise to see if new indications and candidates are actually easing that dependence.

What Exelixis Buyers Are Assuming Now

Exelixis now trades at US$58.39. The selected Narrative’s Fair Value sits below that level, reflecting a view that the share price already credits the oncology group with effective use of cabozantinib cash flows and disciplined spending.

At this price, you are effectively assuming Exelixis turns cabozantinib into a durable multi asset portfolio. The key question is how guidance cuts and zanzalintinib launch risk affect that bet.

"The main requirement is that Exelixis successfully converts its cabozantinib cash flows and broad zanzalintinib trial program into a durable multi-franchise oncology business, while keeping R&D spending disciplined and using AI and cost controls to support free cash flow."

Not everyone reads the same price the same way. → See the lower figure this Narrative lands on, and how it gets there

Find Your Own Contrarian Opportunity

What if your next investment idea came before the headlines? Go straight to the companies whose prices and our estimates still disagree. Three places to start, with the names waiting behind the link.

• Company 1 - 36% below our estimate - relies on data-centric infrastructure mega-project backlog for future contracted work.
• Company 2 - 23% below our estimate - targets leadership in high-margin AI chips as clients rebuild data centers.
• Company 3 - 34% below our estimate - turns technology-heavy construction backlog into modular data center and industrial capacity.

Those are three of them. See all 26 companies with the balance sheet to back it up →

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.

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