Is Exelixis Stock Engineered To Make You Money?

Exelixis (EXEL) stock has returned 46% over the past twelve months, compared with 17.8% for the S&P 500. The company has aggressively repurchased its own stock, reducing its total share count by 21% over the last three years. Because fewer shares remain in circulation, each one lays claim to a larger slice of the profit. So how much is that buyback adding to each Exelixis share you own?

Exelixis Grows Earnings Per Share Faster Than Profit

Share repurchases have added about ten percentage points a year to earnings per share growth. Over the past three years, Exelixis grew its net income by 73.7% annually, while its earnings per share increased by 84.1% a year. Rising profits generated most of that gain, but the difference between the two rates reflects the shrinking share count.

The company continues to reduce its shares outstanding, which fell 8.7% in the last year alone. Over the past twelve months, Exelixis spent roughly $1.1 billion on repurchases—amounting to about $1.0 billion net of employee stock compensation. That outlay represents 6.9% of the company’s $14.6 billion market value. During the second quarter of 2026, it paid an average of $47.85 a share, below today’s price of $58.33. Buybacks are only one factor influencing the stock, however, and each share is ultimately worth only what the market pays for it.

Exelixis Relies On One Drug For Its Cash

The drug CABOMETYX accounted for $2.1 billion of the company’s $2.3 billion in revenue during fiscal 2025. Exelixis converts a large portion of those sales into profit, maintaining a 40.7% operating margin over the last twelve months compared with 18.6% for the S&P 500. Capital spending consumes only 2% of the cash the business generates, leaving nearly all of it available for shareholders.

The company therefore funds its buybacks through surplus cash rather than debt. Currently, Exelixis holds $673 million more in cash than it owes in debt.

Can Exelixis Afford The Buyback After Cutting Its Forecast?

Current cash flow covers the buyback program, though with almost nothing to spare. The company generated $1,158 million of free cash flow over the last twelve months and spent $1,115 million on share repurchases. In May 2026, the board approved a $750 million buyback plan. On an August 5, 2026 earnings call, management noted that about $598 million of that authorization remained.

The worry is the future growth trajectory of CABOMETYX. During that call, management lowered its 2026 revenue forecast to a range between $2.50 billion and $2.55 billion, representing a $50 million reduction at the midpoint. Executives indicated that sales for treating neuroendocrine tumors are building more gradually than they had projected. At the same time, the company reduced its research spending forecast and reported that its projected free cash flow remained essentially unchanged.

Help from a pipeline product is also further away. On September 11, 2026, Exelixis announced that the FDA had extended its review of zanzalintinib, its experimental colorectal cancer drug, by three months into December 2026.

Ultimately, free cash flow is the most critical metric to watch when measured against the roughly $1.1 billion Exelixis spent on buybacks over the last twelve months. If full-year 2026 free cash flow falls below what it spends on repurchases, it would show the company paying for them out of its cash balance.

Does This Mean You Should Act On EXEL?

Our purpose is to inform you with unique data so you make the right investment decisions. That said, betting on a single stock is always risky, no matter which direction you choose.

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