On Monday, Oppenheimer adjusted its outlook on Relay Therapeutics (NASDAQ:RLAY) shares, a clinical-stage precision medicine company, by reducing its price target to $25 from the previous $33. The firm retained its Outperform rating on the stock despite the adjustment.
This change follows the company's first-quarter 2024 results, which were disclosed last Thursday and did not present any significant surprises. The results were in line with earlier updates, including one from JPM earlier this year.
Relay Therapeutics' recent earnings report indicated that significant data would not be available until the end of 2024, echoing sentiments from the fourth-quarter update. The company has been open about this timeline, setting expectations for when more substantial information will be released.
In the meantime, Relay Therapeutics' progress can't be easily compared to competitors as there has been no de-risking data available, particularly from Scorpion, as noted in the American Society of Clinical Oncology (ASCO) abstracts.
Despite the delayed timeline for data, Oppenheimer's outlook on Relay Therapeutics remains positive, especially regarding RLY-2608, the company's lead drug candidate.
The analyst believes that the drug's improved selectivity could lead to better tolerability and, consequently, longer periods of patient usage. The current benchmark for success, as set by the ByLIEVE trial, is considered low, with a median progression-free survival (mPFS) of approximately six months.
The firm's reiteration of the Outperform rating signifies confidence in the potential of Relay Therapeutics' drug and its future prospects. Although the price target has been lowered, the anticipation for end-of-year data remains a critical point of interest for the company and its stakeholders.
Relay Therapeutics continues to focus on its development pipeline, with the investment community watching closely for the upcoming data that could validate the company's therapeutic approach.
InvestingPro Insights
In light of Oppenheimer's recent adjustment of Relay Therapeutics' price target, InvestingPro data provides additional context that may be valuable to investors. With a market capitalization of $934.5 million, Relay Therapeutics is a company that holds more cash than debt, as per one of the InvestingPro Tips. This could be a point of interest for investors looking for companies with a strong balance sheet. However, it's important to note that the company is quickly burning through cash and analysts do not anticipate the company will be profitable this year. Relay's stock price has experienced a 6.83% increase over the past week, which may suggest a short-term positive sentiment among investors.
The company's P/E ratio stands at -2.67, with an adjusted figure of -2.79 for the last twelve months as of Q1 2024. This indicates that the company is not currently profitable, which aligns with another InvestingPro Tip suggesting weak gross profit margins. The substantial revenue growth of 2873.65% over the last twelve months is impressive, yet it's essential to consider this in the context of the company's overall financial health, including its significant operating loss of $369.44 million over the same period.
Investors interested in deeper analysis can find more InvestingPro Tips on the dedicated page for Relay Therapeutics, which could offer further insights into the company's financials and performance metrics. For those considering an InvestingPro subscription, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. There are currently 8 additional tips available for Relay Therapeutics on InvestingPro, which could help investors make more informed decisions.
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