Exelixis Reports Solid Earnings-Are New Highs Back on the Table?

Exelixis Inc. (NASDAQ: EXEL) stock is down about 2% in early trading the day after the company delivered a solid, but mixed earnings report. The company reported earnings per share (EPS) of 94 cents, which was 27% above the consensus estimate and 95% higher on a year-over-year (YoY) basis.

That profit also showed up in the company’s operating margin, which the company plans to put into future research and development for its franchise strategy. Exelixis also bought back $264.5 million of its stock.

The revenue news was mixed. The $598.66 million in revenue came in short of expectations for $609.17. However, it was 5% above the $566.76 million the company reported in the same quarter last year. That revenue was largely driven by Cabometyx, the company's branded formulation of cabozantinib used across multiple cancer types.

Exelixis forecasts revenue between $2.52 billion and $2.62 billion in 2026. But that comes with an important caveat. Namely, it doesn’t include the potential revenue it could see if it receives regulatory approval for zanzalintinib, its pipeline candidate for the treatment of colorectal cancer.

What Makes Exelixis Different?

On one level, Exelixis offers investors the same risk-reward profile as other biotech companies. However, investors should take a closer look at the company’s franchise strategy.

At a high level, Exelixis is building comprehensive treatment ecosystems around specific drug molecules. The goal is to build deep expertise in specific tumor types with multiple treatment lines and combinations that physicians can deploy at different stages.

In layman’s terms, Exelixis is working towards having multiple arrows in its quiver for specific cancers, whether that be first-line, second-line, or combination therapies. The company believes this approach can help them be the go-to choice for oncologists who are treating patients with kidney cancer, colorectal cancer, or neuroendocrine cancers.

There are two key takeaways for investors relative to its fourth-quarter earnings report.

• Cabozantinib works in kidney cancer, both as monotherapy and combined with immunotherapy. This is the key driver of revenue today.

• Zanzalintinib is considered "the foundation of future oncology franchises" with the potential to reach $5 billion in peak annual sales.

Consolidation Now, Growth Later

At 18x trailing twelve-month earnings and 21x forward earnings, EXEL stock does come at a slight premium to the broader biotechnology sector. However, the company’s franchise model and deep pipeline make it a premium worth paying for the expected growth.

The EXEL chart looks constructive with the stock price sitting just below the 50-day simple moving average (SMA), which has recently served as support. Momentum indicators are neutral and heading into earnings; the stock was 8.6% below its consensus price target of $46.12.

The day after earnings, Wells Fargo & Company reiterated an Equal Weight rating for EXEL stock. The firm also raised its price target to $35 from $30. That aligns with Barclays, which raised its price target to $44 from $41 on Feb. 4.

While EXEL stock is in a consolidation pattern for now, if the company’s growth materializes, all-time highs are likely within the next 12 months.

Exelixis Is at an Inflection Point

The story here isn't just about beating earnings expectations or hitting revenue milestones. Exelixis is moving from a single-product company to a multi-franchise oncology player, and 2026 is when that transition becomes real.

The FDA decision on zanzalintinib in colorectal cancer (Prescription Drug User Fee Act (PDUFA) date: Dec. 3, 2026) represents the company's first major expansion beyond cabozantinib. If approved, it opens the door to a potential $5 billion peak sales opportunity and validates the franchise strategy the company has been building toward.

But the real tell is in the R&D spending. Despite strong profitability, Exelixis is maintaining roughly $1 billion in annual R&D investment while executing share buybacks. That's a company confident in its pipeline math. That means balancing investor returns with aggressive development across seven pivotal trials for zanzalintinib alone, plus four early-stage programs advancing toward full development.

For context, the expanded GI sales team isn't just about NET growth; it's pre-positioning for a potential zanzalintinib launch later this year. The pieces are moving into place for a different kind of biotech story: sustainable, multi-product growth anchored in deep tumor expertise rather than binary drug bets.

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