Relay Therapeutics (NASDAQ:RLAY) vs. Alector (NASDAQ:ALEC) Head-To-Head Review

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

Risk & Volatility

Alector has a beta of 0.51, meaning that its share price is 49% less volatile than the S&P 500. Comparatively, Relay Therapeutics has a beta of 1.59, meaning that its share price is 59% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Alector and Relay Therapeutics, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alector	2	2	3	0	2.14
Relay Therapeutics	0	1	10	0	2.91

Alector presently has a consensus price target of $3.75, suggesting a potential upside of 101.61%. Relay Therapeutics has a consensus price target of $20.50, suggesting a potential upside of 392.79%. Given Relay Therapeutics’ stronger consensus rating and higher possible upside, analysts clearly believe Relay Therapeutics is more favorable than Alector.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Alector	-257.54%	-108.77%	-27.03%
Relay Therapeutics	N/A	-45.75%	-40.75%

Earnings and Valuation

This table compares Alector and Relay Therapeutics”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alector	$61.51 million	2.96	-$130.39 million	($1.70)	-1.09
Relay Therapeutics	$10.01 million	69.59	-$341.97 million	($2.61)	-1.59

Alector has higher revenue and earnings than Relay Therapeutics. Relay Therapeutics is trading at a lower price-to-earnings ratio than Alector, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

85.8% of Alector shares are owned by institutional investors. Comparatively, 97.0% of Relay Therapeutics shares are owned by institutional investors. 9.1% of Alector shares are owned by company insiders. Comparatively, 4.3% of Relay Therapeutics shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Relay Therapeutics beats Alector on 8 of the 14 factors compared between the two stocks.

About Alector

Alector, Inc., a clinical stage biopharmaceutical company, develops therapies for the treatment of neurodegeneration diseases. Its products include AL001, an immune activity in the brain with genetic links to multiple neurodegenerative disorders, which is in Phase III clinical trial for the treatment of frontotemporal dementia, Alzheimer's, Parkinson's, and amyotrophic lateral sclerosis diseases; and AL101 that is in Phase I clinical trial for the treatment of neurodegenerative diseases, including Alzheimer's and Parkinson's diseases. The company also offers AL002, a product candidate that is in Phase II clinical trial for the treatment of Alzheimer's disease. Alector, Inc. has a collaboration agreement with Adimab, LLC for the research and development of antibodies; and a strategic collaboration agreement with GlaxoSmithKline plc for the development and commercialization of monoclonal antibodies, such as AL001 and AL101 to treat neurodegenerative diseases. The company was founded in 2013 and is headquartered in South San Francisco, California.

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.