Analyzing Relay Therapeutics (NASDAQ:RLAY) and Zenas BioPharma (NASDAQ:ZBIO)

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

Insider & Institutional Ownership

97.0% of Relay Therapeutics shares are owned by institutional investors. 5.0% of Relay Therapeutics shares are owned by company insiders. Comparatively, 22.0% of Zenas BioPharma shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Relay Therapeutics	$15.35 million	271.82	-$276.48 million	($1.57)	-12.13
Zenas BioPharma	$10.00 million	214.31	-$377.74 million	($8.99)	-3.66

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.

Volatility and Risk

Relay Therapeutics has a beta of 1.69, meaning that its share price is 69% more volatile than the S&P 500. Comparatively, Zenas BioPharma has a beta of -1.04, meaning that its share price is 204% less volatile than the S&P 500.

Profitability

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

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

Analyst Recommendations

This is a summary of recent ratings for Relay Therapeutics and Zenas BioPharma, as reported by MarketBeat.com.

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

Relay Therapeutics presently has a consensus target price of $25.92, suggesting a potential upside of 36.12%. Zenas BioPharma has a consensus target price of $45.71, suggesting a potential upside of 39.03%. Given Zenas BioPharma’s higher probable upside, analysts clearly believe Zenas BioPharma is more favorable than Relay Therapeutics.

Summary

Relay Therapeutics beats Zenas BioPharma on 11 of the 14 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 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.