Critical Analysis: Relay Therapeutics (NASDAQ:RLAY) & Zenas BioPharma (NASDAQ:ZBIO)

Zenas BioPharma (NASDAQ:ZBIO) and Relay Therapeutics (NASDAQ:RLAY) are both mid-cap healthcare companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, institutional ownership and earnings.

Volatility and Risk

Zenas BioPharma has a beta of -1.03, indicating that its share price is 203% less volatile than the S&P 500. Comparatively, Relay Therapeutics has a beta of 1.69, indicating that its share price is 69% more volatile than the S&P 500.

Profitability

This table compares Zenas BioPharma and Relay Therapeutics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Zenas BioPharma	N/A	-122.45%	-58.04%
Relay Therapeutics	N/A	-42.27%	-38.67%

Analyst Recommendations

This is a breakdown of recent recommendations for Zenas BioPharma and Relay Therapeutics, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Zenas BioPharma	1	2	6	0	2.56
Relay Therapeutics	1	1	10	2	2.93

Zenas BioPharma currently has a consensus price target of $45.71, indicating a potential upside of 46.19%. Relay Therapeutics has a consensus price target of $25.92, indicating a potential upside of 38.07%. Given Zenas BioPharma’s higher probable upside, equities analysts plainly believe Zenas BioPharma is more favorable than Relay Therapeutics.

Institutional and Insider Ownership

97.0% of Relay Therapeutics shares are held by institutional investors. 22.0% of Zenas BioPharma shares are held by insiders. Comparatively, 5.0% of Relay Therapeutics shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Zenas BioPharma	$1.00 million	2,038.08	-$377.74 million	($8.99)	-3.48
Relay Therapeutics	$15.35 million	267.96	-$276.48 million	($1.57)	-11.96

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

Summary

Relay Therapeutics beats Zenas BioPharma on 10 of the 14 factors compared between the two stocks.

About Zenas BioPharma

Zenas BioPharma, Inc. is a clinical-stage global biopharmaceutical company, which engages in the development and commercialization of transformative immunology-based therapies for patients. The company was founded by Lonnie O. Moulder Jr on November 12, 2019 and is headquartered in Waltham, MA.

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.