Why Relay Therapeutics Stock Popped on Wednesday
Key Points
This was aided by a pair of bullish analyst updates.
The two pundits raised their price targets and maintained their buy ratings.
- 10 stocks we like better than Relay Therapeutics ›
One trading session after Relay Therapeutics (NASDAQ: RLAY) announced positive results for an investigational treatment, its shares rocketed higher on Wednesday. That rally, which saw the biotech stock rocket almost 8% higher, was aided in no small part by a pair of bullish analyst updates.
High-potential pipeline
Those new analyses came on the heels of Relay's Tuesday release of Phase 2 results for zovegalisib, a drug that treats vascular anomalies. The company said that, across all doses of the medication, 60% of tested patients responded to treatment at the earliest time point of 12 weeks.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Image source: Getty Images.
These figures were well above the projections of most analysts tracking the stock. Relay added that nearly all individuals administered the drug experienced symptomatic improvements at the 12-week mark, and that zovegalisib demonstrated a positive safety and tolerability profile.
Although this was indisputably a positive development, it was mitigated by the company's announcement that it would float a secondary issue of its common stock. Including a purchase option for the issue's underwriters, the issue could exceed $200 million. Although this isn't overly dilutive given Relay's nearly $2.5 billion market cap, no investor likes share dilution.
Two bulls get more bullish
Yet not one, but two professional Relay-watchers felt compelled to significantly raise their price targets on the stock. Barclays' Peter Lawson upped his to $27 per share from $21, while Silvan Turkcan of Citizens JMP moved his to $21 from $19. Both maintained their buy recommendations on the shares.
These far better-than-expected results are, in my view, enough reason to invest in the highly promising biotech. I wouldn't worry at all about share dilution, and I'd feel confident owning stock of a company developing a medication that has shown such promise.
Should you buy stock in Relay Therapeutics right now?
Before you buy stock in Relay Therapeutics, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Relay Therapeutics wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $481,750!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,352,457!*
Now, it’s worth noting Stock Advisor’s total average return is 990% — a market-crushing outperformance compared to 206% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of May 20, 2026.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Barclays Plc. The Motley Fool has a disclosure policy.
Recommended Articles
