Relay Therapeutics, Inc. (NASDAQ:RLAY) Analysts Just Trimmed Their Revenue Forecasts By 12%

The latest analyst coverage could presage a bad day for Relay Therapeutics, Inc. (NASDAQ:RLAY), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

After the downgrade, the consensus from Relay Therapeutics' eleven analysts is for revenues of US$400k in 2024, which would reflect a disturbing 98% decline in sales compared to the last year of performance. Per-share losses are expected to see a sharp uptick, reaching US$2.88. Yet before this consensus update, the analysts had been forecasting revenues of US$455k and losses of US$2.88 per share in 2024. So there's definitely been a change in sentiment in this update, with the analysts administering a substantial haircut to this year's revenue estimates, while at the same time holding losses per share steady.

Check out our latest analysis for Relay Therapeutics

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. Over the past five years, revenues have declined around 5.1% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 98% decline in revenue until the end of 2024. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 18% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect Relay Therapeutics to suffer worse than the wider industry.

The Bottom Line

Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Relay Therapeutics going forwards.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Relay Therapeutics' financials, such as dilutive stock issuance over the past year. Learn more, and discover the 2 other risks we've identified, for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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