Relay Therapeutics Inc. (RLAY) Clearly Signals Buy-Into the Stock: Don’t ignore the signals

Relay Therapeutics Inc. (NASDAQ: RLAY) stock jumped 0.97% on Monday to $20.78 against a previous-day closing price of $20.58. With 1.4 million shares changed hands, the volume of the stock remained heavier than its average volume of 1.27 million shares. During the session, the Biotechnology company that operates in wider Healthcare sector, reached to the highest price of $21.05 whereas the lowest price it dropped to was $20.38. The 52-week range on RLAY shows that it touched its highest point at $35.36 and its lowest point at $12.65 during that stretch. It currently has a 1-year price target of $36.20.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of RLAY was up-trending over the past week, with a rise of 0.05%, but this was up by 32.19% over a month. Three-month performance surged to 4.84% while six-month performance fell -1.75%. The stock lost -11.69% in the past year, while it has gained 39.09% so far this year. A look at the trailing 12-month EPS for RLAY yields -2.69 with Next year EPS estimates of -3.05. For the next quarter, that number is -0.70. This implies an EPS growth rate of -49.40% for this year and -11.30% for next year.

Float and Shares Shorts:

At present, 120.89 million RLAY shares are outstanding with a float of 115.44 million shares on hand for trading. On Oct 13, 2022, short shares totaled 13.06 million, which was 10.86% higher than short shares on Sep 14, 2022. In addition to Mr. Alexis A. Borisy A.M. as the firm’s Co-Founder & Independent Chairman, Dr. Sanjiv K. Patel M.A., M.B.A., M.D., MBBS serves as its CEO, Pres & Director.

Institutional Ownership:

Through their ownership of 101.03% of RLAY’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 47.37% of RLAY, in contrast to 27.62% held by mutual funds. Shares owned by individuals account for 12.17%. As the largest shareholder in RLAY with 9.05% of the stake, Fidelity Management & Research Co holds 10,945,949 shares worth 10,945,949. A second-largest stockholder of RLAY, The Vanguard Group, Inc., holds 8,219,612 shares, controlling over 6.80% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in RLAY, holding 5,461,356 shares or 4.52% stake. With a 3.85% stake in RLAY, the SPDR S&P Biotech ETF is the largest stakeholder. A total of 4,654,167 shares are owned by the mutual fund manager. The BB Biotech AG, which owns about 3.41% of RLAY stock, is the second-largest Mutual Fund holder. It holds 4,120,720 shares valued at 61.56 million. Vanguard Total Stock Market Index holds 2.93% of the stake in RLAY, owning 3,540,393 shares worth 52.89 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for RLAY since 10 analysts follow the stock currently. There are 9 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 1 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With RLAY analysts setting a high price target of $45.00 and a low target of $23.00, the average target price over the next 12 months is $38.44. Based on these targets, RLAY could surge 116.55% to reach the target high and rise by 10.68% to reach the target low. Reaching the average price target will result in a growth of 84.99% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. RLAY will report FY 2022 earnings on 02/23/2024. Analysts have provided yearly estimates in a range of -$2.55 being high and -$2.84 being low. For RLAY, this leads to a yearly average estimate of -$2.74. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Relay Therapeutics Inc. surprised analysts by -$0.05 when it reported -$0.76 EPS against a consensus estimate of -$0.71. The surprise factor in the prior quarter was -$0.08. Based on analyst estimates, the high estimate for the next quarter is -$0.51 and the low estimate is -$0.79. The average estimate for the next quarter is thus -$0.70.

Summary of Insider Activity:

Insiders traded RLAY stock several times over the past three months with 4 Buys and 11 Sells. In these transactions, 50,000 shares were bought while 55,812 shares were sold. The number of buy transactions has increased to 36 while that of sell transactions has risen to 61 over the past year. The total number of shares bought during that period was 578,017 while 468,150 shares were sold.

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