Relay Therapeutics (RLAY): Reassessing Valuation After Renewed Institutional Buying and Late-Stage Trial Progress

Commodore Capital’s decision to lift its stake in Relay Therapeutics (RLAY) after adding nearly 3.7 million shares is catching investors attention, especially as the company tightens spending and extends its cash runway. See our latest analysis for Relay Therapeutics. Those moves seem to be feeding into sentiment, with a 90 day share price return of around 87 percent and a 1 year total shareholder return above 70 percent, suggesting that momentum is rebuilding after a tough multi year stretch. If this kind of rebound has you wondering what else might be setting up for a turn, it could be worth exploring healthcare stocks as potential next candidates. Yet with shares still trading at a steep discount to Wall Street’s targets after years of losses, is Relay now an underappreciated turnaround story, or are investors already baking in much of the company’s future growth potential? Price-to-Book of 2.1x: Is it justified? Relay Therapeutics last closed at $7.49, and its valuation looks modest when viewed through the lens of its price-to-book ratio relative to peers. The price-to-book multiple compares a company’s market value to its net assets, which is a common yardstick for asset heavy or early stage biotech names where earnings are still negative. Relay’s 2.1x price-to-book sits below both the wider US Biotechs industry average of 2.5x and a much richer 12.4x peer group average, implying the market is assigning a discount to the company’s balance sheet. This gap versus industry and peer benchmarks suggests investors are not paying up for Relay’s asset base in the same way they are for comparable biotech names. It also leaves room for sentiment to shift if the growth story begins to translate into clearer paths toward commercialisation and, eventually, profitability. See what the numbers say about this price — find out in our valuation breakdown. Result: Price-to-Book of 2.1x (UNDERVALUED) However, Relay remains a loss making, clinical stage biotech, so any trial setbacks or delays in partnerships could quickly derail the current optimism. Find out about the key risks to this Relay Therapeutics narrative. Build Your Own Relay Therapeutics Narrative If you see the numbers differently or want to dig into the details yourself, you can build a customized view in minutes: Do it your way. A great starting point for your Relay Therapeutics research is our analysis highlighting 1 key reward and 4 important warning signs that could impact your investment decision. Looking for more investment ideas before you move on? Do not stop with a single compelling story when you can quickly scan hand picked opportunities that match your goals, risk appetite, and return expectations. Capture potential mispricings by running through these 928 undervalued stocks based on cash flows that could offer stronger upside than mature, fully priced names. Ride powerful structural trends by checking out these 25 AI penny stocks positioned at the intersection of software, data, and automation. Boost your income potential with these 14 dividend stocks with yields > 3% that balance yield, payout sustainability, and long term resilience. 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.