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Relay Therapeutics (RLAY): Reassessing Valuation After Encouraging New Breast Cancer Data for Zovegalisib

Simply Wall St · 2d ago

Relay Therapeutics (RLAY) just put fresh clinical data for its PI3Kα inhibitor zovegalisib in the spotlight at the San Antonio Breast Cancer Symposium, and the update helps clarify how the stock’s story is evolving.

See our latest analysis for Relay Therapeutics.

That backdrop helps explain why, even after a 5.31% one day pullback to $8.03, Relay’s 30 day share price return is 23.35% and its year to date share price return sits at 86.74%. The 3 year total shareholder return of negative 47.03% still reminds investors this is a high risk, long duration story where momentum appears to be rebuilding off a deep base.

If zovegalisib has you rethinking where the next breakthrough could come from, it might be worth scanning other healthcare stocks that could benefit from similar clinical or regulatory catalysts.

With the stock still trading at a steep discount to Wall Street targets despite a powerful rebound, is Relay a misunderstood clinical winner in the making, or are investors already baking in the next leg of growth?

Price-to-Book of 2.3x: Is it justified?

Based on a price to book ratio of 2.3 times and a last close of $8.03, Relay Therapeutics currently screens as inexpensive next to its peers.

The price to book multiple compares the market value of the company to the accounting value of its net assets, a common yardstick for early stage, loss making biotechs where earnings are not yet a reliable guide.

For Relay, trading at 2.3 times book value suggests investors are not paying a premium for its pipeline despite forecasts for rapid top line expansion, even though the company remains unprofitable and is not expected to reach profitability in the near term.

Set against the broader US Biotechs industry at 2.7 times book and an even richer 6 times for close peers, Relay’s discount is stark and implies the market is valuing its asset base and future optionality more conservatively than the group.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-Book of 2.3x (UNDERVALUED)

However, Relay still faces typical biotech risks, including trial setbacks for zovegalisib or RLY 4008, and potential dilution if funding needs intensify.

Find out about the key risks to this Relay Therapeutics narrative.

Build Your Own Relay Therapeutics Narrative

If this perspective does not quite fit your view, or you would rather dive into the numbers yourself, you can build a custom narrative in just a few 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.

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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.