Shareholders in Relay Therapeutics, Inc. (NASDAQ:RLAY) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.

Following the latest upgrade, the twelve analysts covering Relay Therapeutics provided consensus estimates of US$9.7m revenue in 2026, which would reflect a substantial 37% decline on its sales over the past 12 months. Per-share losses are expected to creep up to US$1.51. However, before this estimates update, the consensus had been expecting revenues of US$6.2m and US$1.52 per share in losses. So there's been quite a change-up of views after the recent consensus updates, withthe analysts noticeably increasing their revenue forecasts while also expecting losses per share to hold steady.

Analysts increased their price target 17% to US$21.00, perhaps signalling that higher revenues are a strong leading indicator for Relay Therapeutics's valuation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Relay Therapeutics' past performance and to peers in the same industry. We would also point out that the forecast 37% annualised revenue decline to the end of 2026 is roughly in line with the historical trend, which saw revenues shrink 43% annually over the past five years By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 21% 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

The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Relay Therapeutics is moving incrementally towards profitability. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Relay Therapeutics.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Relay Therapeutics going out to 2028, and you can see them free on our platform here..

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.