Relay Therapeutics, Inc. (NASDAQ:RLAY) Analysts Are Cutting Their Estimates: Here's What You Need To Know
As you might know, Relay Therapeutics, Inc. (NASDAQ:RLAY) last week released its latest second-quarter, and things did not turn out so great for shareholders. It looks to have been a weak result overall, as revenue of US$350k were 56% less than the analysts expected. Unsurprisingly, losses were also somewhat larger than was modelled, at US$0.41 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, Relay Therapeutics' ten analysts currently expect revenues in 2026 to be US$10.2m, approximately in line with the last 12 months. Per-share losses are expected to explode, reaching US$1.59 per share. Before this earnings announcement, the analysts had been modelling revenues of US$11.8m and losses of US$1.54 per share in 2026. There's been a definite change in sentiment in this update, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.
See our latest analysis for Relay Therapeutics
The average price target was broadly unchanged at US$26.77, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Relay Therapeutics analyst has a price target of US$32.00 per share, while the most pessimistic values it at US$20.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Relay Therapeutics shareholders.
Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2026 compared to the historical decline of 30% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 23% per year. So while a broad number of companies are forecast to grow, unfortunately Relay Therapeutics is expected to see its revenue affected worse than other companies in the industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at US$26.77, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Relay Therapeutics going out to 2028, and you can see them free on our platform here..
It is also worth noting that we have found 2 warning signs for Relay Therapeutics that you need to take into consideration.
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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.