Exelixis (EXEL) Stock Extends Rally As Q3 Earnings Lift Margins

Exelixis came into Friday already on a strong run, and the stock then jumped another 4.7% to close at $69.34 once investors digested its Q3 2026 report. At first glance this looks like a simple momentum move. Look closer and the real story is about profits. The company delivered roughly $659m in quarterly revenue with net income of about $218m, powered by the cabozantinib cancer franchise. Short term traders focused on the pop. Long term holders are likely watching a business that is turning oncology scale into a steadily thicker earnings stream.

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Q3 2026 Earnings Summary

• Revenue (Q3 2026 vs. Q3 2025): US$658.7m vs. US$597.8m (up about 10.2%)
• Net Income, Excl. Extra Items (Q3 2026 vs. Q3 2025): US$218.1m vs. US$193.6m (up about 12.7%)
• Basic EPS (Q3 2026 vs. Q3 2025): US$0.88 vs. US$0.72 (up about 22.6%)
• Trailing 12-Month Net Profit Margin (Q3 2026 vs. Q3 2025): 35.5% vs. 29.6% (margin higher by 5.9 percentage points)

Exelixis just called zanzalintinib its next growth engine. Ask Charlie what makes Exelixis bet big on zanzalintinib now.

Exelixis Starts to Back Its Multi Franchise Ambition

Supporters argue Exelixis can turn cabozantinib cash into a broader oncology platform rather than stay a one drug story.

"The breadth of seven ongoing or imminent pivotal zanzalintinib trials across colorectal cancer, non clear cell RCC, neuroendocrine tumors, meningioma and other GU or GI tumors creates scope for multiple indications to layer on over time, which can shift Exelixis’ revenue mix away from a single compound and affect earnings resilience."

Q3 results show real progress against that ambition. Management confirmed seven potentially label enabling zanzalintinib studies are active; the first filing in metastatic colorectal cancer is already under FDA review; and CABO cash flow plus US$1.4b of liquidity are funding this push without abandoning disciplined R&D and heavy buybacks.

One Narrative disagrees with today's price. → See where this Narrative says Exelixis should trade.

Exelixis Bear Case: Execution Wobbles, Cash Still Talks

Bearish investors worry Exelixis will stumble on launches and disclosures rather than pricing alone.

"the cut to 2026 revenue guidance after a slower than expected CABOMETYX neuroendocrine tumor ramp suggests that new indications may not offset concentration risk as quickly as hoped, which could leave overall revenue and net margins more exposed as the patent window approaches the early 2030s."

The Q3 beat and reaffirmed 2026 revenue range of US$2.5b to US$2.55b show that the earlier guidance trim has not turned into a cascade of downgrades. That said, the extended zanzalintinib colorectal PDUFA to March 2027 is a clear milestone missed, so the reliance on cabozantinib cash flows and the associated earnings volatility risk remain intact.

Hunt For Mispriced Earnings Power

Exelixis just reminded investors that earnings reports can rapidly reshape expectations. The real opportunity sits with stocks that could be undervalued before stronger fundamentals fully register.

• Company 1 - 35% below our estimate - builds an integrated AI hardware and software stack as data centers adapt to rising power needs.
• Company 2 - 15% below our estimate - wins electrical and communications contracts on hyperscale data center builds as capacity expands.
• Company 3 - 46% below our estimate - converts a near record infrastructure backlog into higher margin mega-projects while resolving legacy disputes.

That is three of the list. See every one of the 30 undervalued companies on it →

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