Hook & Thesis
Xeris Biopharma is no longer a single-product development story — Recorlev is now a commercial growth engine and the numbers are starting to show. Revenue jumped to $71.5 million in Q2 2025, up 48.8% year-over-year, and management raised full-year revenue guidance after that quarter. At the current price of $7.41, the market is pricing a commercial-stage biotech with durable product revenue but still losing money on the earnings line. That mix creates a concrete, tradeable setup: buy the Recorlev-led momentum with a clear stop and a defined upside target.
My actionable recommendation: a mid-term long swing trade with entry at $7.35, stop loss at $6.25, and a target of $9.25 over the next mid term (45 trading days). This plan captures continued top-line acceleration and multiple expansion if Recorlev keeps hitting adoption benchmarks, while limiting downside if execution stalls or sentiment reverses.
What Xeris Does and Why the Market Should Care
Xeris is a commercial-stage biopharma with three marketed products: Gvoke (ready-to-use liquid glucagon for severe hypoglycemia), Keveyis (for periodic paralysis variants), and Recorlev (a cortisol synthesis inhibitor approved for endogenous hypercortisolemia in adults with Cushing's syndrome). Recorlev has emerged as the primary growth driver; the company specifically cited strong Recorlev sales when reporting the Q2 2025 results that produced the ~49% revenue jump.
Why that matters: Cushing's syndrome is a rare but high-acuity endocrine condition where effective medical therapy can command premium pricing and steady demand. When a company moves from a development story to recurring commercial revenue, the growth profile changes — investors can value forward cash flows more concretely. Xeris now shows real free cash flow generation (free cash flow of about $9.98 million) and improving adjusted EBITDA as per its recent results, which is why the market has been more willing to assign a multi-billion-dollar enterprise value to the firm.
Supporting Numbers
- Q2 2025 revenue: $71.5 million, +48.8% YoY, driven by Recorlev.
- Market capitalization: ~$1.22 billion. Enterprise value: ~$1.35 billion.
- Price/sales: 4.59x. EV/sales: 5.07x.
- Free cash flow: ~$9.98 million, indicating initial cash generation from commercial operations.
- Reported EPS (trailing): -$0.09, reflecting ongoing GAAP losses while commercial scale builds.
- Shares outstanding: ~165.9 million; float ~155.2 million.
- Short interest (1/15/2026): ~16.88 million shares, roughly 10.9% of the float, days to cover ~6.
- Technicals: current price $7.41 sits near the 50-day averages (SMA50 ~$7.24) and RSI at ~48, showing neutral momentum with space for a directional move.
Valuation Framing
At a market cap near $1.22 billion and EV roughly $1.35 billion, Xeris is trading at ~4.6x price-to-sales and ~5.1x EV-to-sales. That multiple is neither dirt-cheap nor frothy for a commercial-stage specialty pharma business with multiple revenue streams. The positive is a move into free cash flow generation (~$10M), and raised guidance after Q2 2025 suggests revenue visibility is improving. The negative is ongoing GAAP losses and relatively high EV/EBITDA (~61.5x) which implies the market expects continued earnings improvement.
Absent direct peers in this dataset for a strict multiple-to-peer comparison, think of the valuation as a market-implied bet on continued Recorlev uptake and margin expansion from scaling the existing franchises (Gvoke/Ogluo and Keveyis) without major regulatory setbacks. If Recorlev sustains rapid growth over the next few quarters, the current multiples look reasonable. If growth cools, multiples will re-rate lower quickly because the company still reports negative EPS.
Catalysts to Watch (near to mid term)
- Quarterly results and guidance updates that confirm Recorlev momentum and margin expansion (next earnings release).
- Market-share wins or new formulary placements for Recorlev that increase prescription uptake.
- Regulatory or label expansion news for Recorlev or commercial updates for Gvoke/Ogluo that increase addressable market.
- Analyst estimate upgrades or institutional buying following sustained revenue beats and positive adjusted EBITDA trends.
Trade Plan (Actionable)
Trade direction: Long.
Entry: $7.35 — execute on a small dip or near current levels to capture momentum while limiting slippage.
Stop loss: $6.25 — this protects against a sustained break below the recent consolidation zone and limits downside to roughly 15% from entry.
Target: $9.25 — near-term upside to the $9–$10 area reflects multiple expansion and re-capture toward the 52-week high of $10.08 if Recorlev growth continues to accelerate.
Horizon: mid term (45 trading days). I expect the share-price move to play out over several weeks as earnings, prescription trends and sentiment react to fresh commercial metrics. This is not an immediate intraday scalp but also not a multi-quarter buy-and-hold. Re-assess if the stock approaches the stop or target early; otherwise hold until the 45 trading day mark and re-evaluate based on results and catalysts.
Positioning and sizing: keep the position size consistent with your risk tolerance so that hitting the stop does not meaningfully damage portfolio equity. The trade has an asymmetric payoff: ~+25.8% upside to the target vs ~-15% downside to the stop (roughly a 1.7:1 reward-to-risk). Adjust sizing accordingly.
Balanced Risks and Counterarguments
- Regulatory or safety setbacks: any adverse safety signals or additional label restrictions for Recorlev could sharply compress valuation.
- Reimbursement pressure or formulary exclusion: specialty drugs depend on payer coverage; if payers push back or require step edits, adoption could slow.
- Execution risk: commercial execution (sales force effectiveness, supply issues, distribution) matters — rising revenue in one quarter can stall without consistent follow-through.
- High short interest and volatility: short interest of ~16.9 million shares (~10.9% of float) and active short-volume days can create choppy trading and rapid reversals; this raises the trade's volatility profile.
- Valuation sensitivity: although price/sales and FCF look reasonable for a growing commercial biotech, EV/EBITDA is high; if the market lowers expectations for margin expansion, multiples can re-rate faster than fundamentals deteriorate.
Counterargument: One valid counterpoint is that the recent revenue acceleration is lumpy and concentrated; if Recorlev's growth is front-loaded due to one-time pushes (promotions, stocking) rather than sustainable demand, the market may have already priced the near-term gains. In that case, payoff to price would be limited and downside risk increases, making the long trade less attractive.
What Would Change My Mind
Positive triggers that would strengthen the bull case: consistent revenue beats over the next two quarters, clear signs of durable payer coverage for Recorlev, and meaningful margin expansion that pushes adjusted EBITDA consistently positive.
Red flags that would flip me to bearish: missed revenue or guidance reversals, unexpected safety/regulatory news on Recorlev, or a deterioration in cash flow that forces financing at unfavorable terms. A sustained break below $6.25 on heavy volume would also invalidate the technical setup and force an exit.
Bottom Line
Xeris offers a concrete, tradeable setup today: commercial momentum from Recorlev, positive free cash flow beginnings, and an enterprise value that reflects growth expectations but is not absurdly frothy for a small commercial biotech. For traders willing to accept headline risk and short-interest-driven volatility, the mid-term swing with entry at $7.35, stop at $6.25 and target at $9.25 balances upside from continued Recorlev adoption against a clear, objective downside guardrail. Monitor upcoming results and prescription trends closely — those data points will determine whether this move becomes the start of a multi-quarter re-rating or a one-off pop.
Quick Reference Trade Checklist
| Ticker | Entry | Stop | Target | Horizon |
|---|---|---|---|---|
| XERS | $7.35 | $6.25 | $9.25 | Mid term (45 trading days) |