Comparing Relay Therapeutics (NASDAQ:RLAY) and Tectonic Therapeutic (NASDAQ:TECX)

Relay Therapeutics (NASDAQ:RLAY) and Tectonic Therapeutic (NASDAQ:TECX) are both small-cap medical companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, profitability, risk, analyst recommendations, dividends, valuation and institutional ownership.

Risk and Volatility

Relay Therapeutics has a beta of 1.59, meaning that its stock price is 59% more volatile than the S&P 500. Comparatively, Tectonic Therapeutic has a beta of 2.6, meaning that its stock price is 160% more volatile than the S&P 500.

Valuation & Earnings

This table compares Relay Therapeutics and Tectonic Therapeutic”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Relay Therapeutics	$10.01 million	70.76	-$341.97 million	($2.61)	-1.62
Tectonic Therapeutic	N/A	N/A	$12.16 million	($5.89)	-8.46

Tectonic Therapeutic has lower revenue, but higher earnings than Relay Therapeutics. Tectonic Therapeutic is trading at a lower price-to-earnings ratio than Relay Therapeutics, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

97.0% of Relay Therapeutics shares are owned by institutional investors. Comparatively, 62.6% of Tectonic Therapeutic shares are owned by institutional investors. 4.3% of Relay Therapeutics shares are owned by insiders. Comparatively, 9.2% of Tectonic Therapeutic shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Relay Therapeutics and Tectonic Therapeutic’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Relay Therapeutics	N/A	-45.75%	-40.75%
Tectonic Therapeutic	N/A	-35.53%	-31.97%

Analyst Ratings

This is a breakdown of current ratings and target prices for Relay Therapeutics and Tectonic Therapeutic, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Relay Therapeutics	0	1	10	0	2.91
Tectonic Therapeutic	0	0	5	1	3.17

Relay Therapeutics currently has a consensus price target of $20.50, suggesting a potential upside of 384.63%. Tectonic Therapeutic has a consensus price target of $72.25, suggesting a potential upside of 44.96%. Given Relay Therapeutics’ higher possible upside, equities research analysts clearly believe Relay Therapeutics is more favorable than Tectonic Therapeutic.

Summary

Tectonic Therapeutic beats Relay Therapeutics on 7 of the 13 factors compared between the two stocks.

About Relay Therapeutics

Relay Therapeutics, Inc. operates as a clinical-stage precision medicines company. It engages in transforming the drug discovery process with an initial focus on enhancing small molecule therapeutic discovery in targeted oncology and genetic disease indications. The company’s lead product candidates include RLY-4008, an oral small molecule inhibitor of fibroblast growth factor receptor 2 (FGFR2), which is in a first-in-human clinical trial for patients with advanced or metastatic FGFR2-altered solid tumors; RLY-2608, a lead mutant-PI3Ka inhibitor program that targets phosphoinostide 3 kinase alpha; and Migoprotafib (GDC-1971), an oral, small molecule, potent and selective inhibitor of the protein tyrosine phosphatase SHP2 that binds and stabilizes Src homology region 2 domain-containing phosphatase-2 (SHP2) as a monotherapy in patients with advanced or metastatic solid tumors. In addition, it has collaboration and license agreements with D. E. Shaw Research, LLC to research certain biological targets through the use of D. E. Shaw Research computational modeling capabilities focused on analysis of protein motion to develop and commercialize compounds and products directed to such targets; and Genentech, Inc. for the development and commercialization of GDC-1971. The company was formerly known as Allostery, Inc. and changed its name to Relay Therapeutics, Inc. in December 2015. Relay Therapeutics, Inc. was incorporated in 2015 and is headquartered in Cambridge, Massachusetts.

About Tectonic Therapeutic

Avrobio, Inc. is a bio-technology company. It develops step-change cell and gene therapies for the treatment of cancer and rare disease. The company operates primarily in the United States and Canada. Avrobio, Inc. is based in MA, United States.