Contrasting Relay Therapeutics (NASDAQ:RLAY) and Praxis Precision Medicines (NASDAQ:PRAX)
by Michael Walen · The Markets DailyPraxis Precision Medicines (NASDAQ:PRAX – Get Free Report) and Relay Therapeutics (NASDAQ:RLAY – Get Free Report) are both mid-cap healthcare companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, valuation, institutional ownership, earnings, analyst recommendations, risk and profitability.
Analyst Ratings
This is a breakdown of recent ratings and target prices for Praxis Precision Medicines and Relay Therapeutics, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Praxis Precision Medicines | 2 | 0 | 17 | 3 | 2.95 |
| Relay Therapeutics | 1 | 1 | 10 | 2 | 2.93 |
Praxis Precision Medicines presently has a consensus target price of $630.42, suggesting a potential upside of 149.22%. Relay Therapeutics has a consensus target price of $25.92, suggesting a potential upside of 42.56%. Given Praxis Precision Medicines’ stronger consensus rating and higher probable upside, research analysts plainly believe Praxis Precision Medicines is more favorable than Relay Therapeutics.
Risk and Volatility
Praxis Precision Medicines has a beta of 2.79, suggesting that its stock price is 179% more volatile than the S&P 500. Comparatively, Relay Therapeutics has a beta of 1.72, suggesting that its stock price is 72% more volatile than the S&P 500.
Profitability
This table compares Praxis Precision Medicines and Relay Therapeutics’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Praxis Precision Medicines | N/A | -34.15% | -32.42% |
| Relay Therapeutics | N/A | -42.27% | -38.67% |
Earnings and Valuation
This table compares Praxis Precision Medicines and Relay Therapeutics”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Praxis Precision Medicines | $8.55 million | 826.04 | -$303.27 million | ($12.93) | -19.56 |
| Relay Therapeutics | $15.35 million | 259.54 | -$276.48 million | ($1.57) | -11.58 |
Relay Therapeutics has higher revenue and earnings than Praxis Precision Medicines. Praxis Precision Medicines is trading at a lower price-to-earnings ratio than Relay Therapeutics, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
67.8% of Praxis Precision Medicines shares are owned by institutional investors. Comparatively, 97.0% of Relay Therapeutics shares are owned by institutional investors. 3.0% of Praxis Precision Medicines shares are owned by insiders. Comparatively, 5.0% of Relay Therapeutics shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Summary
Praxis Precision Medicines beats Relay Therapeutics on 8 of the 14 factors compared between the two stocks.
About Praxis Precision Medicines
Praxis Precision Medicines, Inc., a clinical-stage biopharmaceutical company, engages in the development of therapies for central nervous system disorders characterized by neuronal excitation-inhibition imbalance. It is developing ulixacaltamide, a small molecule inhibitor of T-type calcium channels that is in Phase III clinical trial for the treatment of essential tremor; PRAX-562 for the treatment of pediatric patients with developmental and epileptic encephalopathies (DEE); and PRAX-628 to treat focal epilepsy. The company also develops PRAX-222 for the treatment of pediatric patients with early-onset SCN2A-DEE; PRAX-020 to treat KCNT1 related epilepsies; PRAX-080 for the treatment of PCDH19; and PRAX-090 and PRAX-100 for SYNGAP1 and SCN2A-LoF. It has a license agreement with RogCon Inc.; a research collaboration and license agreement with Ionis Pharmaceuticals, Inc.; a strategic collaboration and license agreement with UCB Biopharma SRL; and collaboration with The Florey Institute to develop three novel ASOs. The company was incorporated in 2015 and is based in Boston, Massachusetts.
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.