Relay Therapeutics (NASDAQ:RLAY) & Tectonic Therapeutic (NASDAQ:TECX) Critical Contrast

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

Analyst Ratings

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

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

Tectonic Therapeutic presently has a consensus target price of $72.25, indicating a potential upside of 41.11%. Relay Therapeutics has a consensus target price of $20.50, indicating a potential upside of 360.67%. Given Relay Therapeutics’ higher possible upside, analysts clearly believe Relay Therapeutics is more favorable than Tectonic Therapeutic.

Insider & Institutional Ownership

62.6% of Tectonic Therapeutic shares are owned by institutional investors. Comparatively, 97.0% of Relay Therapeutics shares are owned by institutional investors. 9.2% of Tectonic Therapeutic shares are owned by insiders. Comparatively, 4.3% of Relay Therapeutics shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Volatility and Risk

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

Profitability

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

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

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tectonic Therapeutic	N/A	N/A	$12.16 million	($5.89)	-8.69
Relay Therapeutics	$10.01 million	74.44	-$341.97 million	($2.61)	-1.70

Tectonic Therapeutic has higher earnings, but lower revenue 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.

Summary

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

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.

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.