Comparing SpringWorks Therapeutics (NASDAQ:SWTX) and Relay Therapeutics (NASDAQ:RLAY)

SpringWorks Therapeutics (NASDAQ:SWTX) and Relay Therapeutics (NASDAQ:RLAY) are both medical companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, valuation, profitability, institutional ownership, risk and earnings.

Risk and Volatility

SpringWorks Therapeutics has a beta of 0.81, meaning that its share price is 19% less volatile than the S&P 500. Comparatively, Relay Therapeutics has a beta of 1.61, meaning that its share price is 61% more volatile than the S&P 500.

Valuation and Earnings

This table compares SpringWorks Therapeutics and Relay Therapeutics”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SpringWorks Therapeutics	$191.59 million	22.59	-$325.10 million	($3.48)	-16.60
Relay Therapeutics	$10.01 million	57.04	-$341.97 million	($2.61)	-1.31

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

Analyst Recommendations

This is a breakdown of current ratings for SpringWorks Therapeutics and Relay Therapeutics, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SpringWorks Therapeutics	0	0	5	0	3.00
Relay Therapeutics	0	1	9	0	2.90

SpringWorks Therapeutics presently has a consensus target price of $73.20, indicating a potential upside of 26.73%. Relay Therapeutics has a consensus target price of $19.80, indicating a potential upside of 480.65%. Given Relay Therapeutics’ higher probable upside, analysts clearly believe Relay Therapeutics is more favorable than SpringWorks Therapeutics.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
SpringWorks Therapeutics	-134.73%	-46.74%	-41.12%
Relay Therapeutics	N/A	-45.75%	-40.75%

Insider & Institutional Ownership

97.0% of Relay Therapeutics shares are held by institutional investors. 7.6% of SpringWorks Therapeutics shares are held by insiders. Comparatively, 4.3% of Relay Therapeutics shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Relay Therapeutics beats SpringWorks Therapeutics on 10 of the 14 factors compared between the two stocks.

About SpringWorks Therapeutics

SpringWorks Therapeutics, Inc., a commercial-stage biopharmaceutical company, engages in the development and commercialization of medicines for underserved patient populations suffering from rare diseases and cancer. Its lead product candidate is OGSIVEO (nirogacestat), an oral small molecule gamma secretase inhibitor that is in Phase III DeFi trial for the treatment of desmoid tumors; and Nirogacestat, is also in Phase 2 clinical development as a monotherapy for the treatment of ovarian granulosa cell tumors (GCT), a subtype of ovarian cancer. The company is also involved in the development of mirdametinib, an oral small molecule MEK inhibitor that is in Phase 2b clinical trials for the treatment of neurofibromatosis type 1-associated plexiform neurofibromas (NF1-PN); mirdametinib + lifirafenib, a combination therapy that is in Phase 1b clinical trial in patients with advanced or refractory solid tumors; and mirdametinib in monotherapy and combination approaches to treat other genetically defined solid tumors, including Phase 1/2 clinical trial for the treatment of pediatric and young adult patients with low-grade gliomas. In addition, it develops Brimarafenib (BGB-3245), an oral selective small molecule inhibitor of monomeric and dimeric forms of activating BRAF mutations. The company has collaborations with BeiGene, Ltd. and GlaxoSmithKline LLC; and license agreements with Pfizer Inc. for nirogacestat and mirdametinib. It also has a license agreement with Katholieke Universiteit Leuven and the Flanders Institute for Biotechnology for a portfolio of novel small molecule inhibitors of the TEA Domain; and Dana-Farber Cancer Institute for a portfolio of novel small molecule inhibitors of Epidermal Growth Factor Receptor. The company was founded in 2017 and is headquartered in Stamford, Connecticut.

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.