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Strength Seen in Relay Therapeutics (RLAY): Can Its 6.7% Jump Turn into More Strength?

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Relay Therapeutics, Inc. (RLAY - Free Report) shares soared 6.7% in the last trading session to close at $8.11. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 17.8% gain over the past four weeks.

The sudden surge in the stock price can be attributed to a positive investor mindset regarding the company's pipeline progress. Relay Therapeutics is leveraging its Dynamo platform to initially focus on precision oncology. The company has several candidates currently undergoing early-stage development for various cancer indications. Last week, the company announced positive interim efficacy data from the early-stage study of its doublet therapy, RLY-2608 in combination with Faslodex, to treat metastatic breast cancer.

This company is expected to post quarterly loss of $0.77 per share in its upcoming report, which represents a year-over-year change of -42.6%. Revenues are expected to be $0.35 million, down 98.6% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Relay Therapeutics, the consensus EPS estimate for the quarter has been revised 3% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on RLAY going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Relay Therapeutics is a member of the Zacks Medical - Drugs industry. One other stock in the same industry, Amneal Pharmaceuticals (AMRX - Free Report) , finished the last trading session 1.9% higher at $8.78. AMRX has returned 7.2% over the past month.

Amneal's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.13. Compared to the company's year-ago EPS, this represents a change of -31.6%. Amneal currently boasts a Zacks Rank of #3 (Hold).


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