Relay Therapeutics, Inc. (RLAY) stock intrinsic value fair value estimate & owner earnings analysis

Relay Therapeutics is a clinical-stage precision oncology company that discovers and develops small-molecule cancer drugs using computational and structural biology tools. It has no approved products and no product sales; the limited revenue it reports comes from collaboration and licensing deals with larger drug companies. Two developments define its recent history. Genentech, which had partnered with Relay since December 2020 on the drug migoprotafib, terminated that partnership without cause effective January 7, 2025; Relay is no longer entitled to any further payments from Genentech and has stopped developing that drug. Separately, in December 2024 Relay out-licensed a second drug, lirafugratinib, to Elevar Therapeutics for an upfront payment. The revenue Relay booked in 2025 was driven mostly by recognition tied to that one transaction rather than an ongoing stream, and any future milestone or royalty payments from Elevar depend on Elevar's own success and have not been booked as likely to occur. Relay's remaining focus is largely zovegalisib, a drug that is the subject of a clinical trial collaboration with Pfizer begun in June 2024. Because Relay earns essentially no ongoing revenue while continuing to invest heavily in research, it has spent more cash than it has taken in every year since its 2020 IPO, funded along the way by follow-on stock sales (most recently in September 2024, and again in a larger offering in the first half of 2026). Management has, however, materially slowed the pace of spending: stock-based compensation, a large share of the expense base, fell about a third in 2025 versus 2024 and kept falling into 2026, alongside two rounds of internal restructuring aimed at cutting costs. As of mid-2026 Relay holds roughly $911 million in cash and investments and carries no meaningful debt, against about 218.5 million shares outstanding - a substantial cushion by biotech standards. But we can only assign value to results the company has actually secured, not to hoped-for trial outcomes, so our estimate treats that cash as being consumed over time by the pace of spending the company has actually disclosed, rather than assuming a drug approval or new deal that hasn't happened yet. - Bear case: spending stays near its 2024 level as remaining trials advance without a partner to share costs; at that pace the cash cushion funds roughly two more years before the company must raise more capital on unknown terms or curtail programs - a possibility we can't price in because its terms aren't knowable today. Value: about $0.32 per share. - Base case: spending keeps improving at roughly the pace shown over the last year, funding operations for a little under four years on current cash. Value: about $0.36 per share. - Bull case: cost discipline continues at the faster pace seen in the most recent quarters, consistent with the two restructurings already carried out, extending the funded runway to roughly five years. Value: about $0.84 per share. None of these figures include value for a successful drug approval, a new partnership, or milestone and royalty payments Relay has not yet earned - those are real possibilities but not things we can currently verify, so we leave them at zero rather than guess. That is also why the estimated value is so much lower than the cash on the balance sheet alone: nearly all of that cash is already earmarked, by the company's own reported spending pace, to fund a research program whose future output we cannot yet size. Given how much of the outcome here depends on binary clinical and financing events that a cash-flow estimate can't capture, the margin-of-safety price is set at a substantial discount to our already-conservative base case - around $0.15 per share - and would be revisited only if the company first secures a new, fully-funded collaboration with guaranteed payments that meaningfully extends its runway beyond what current cash alone supports.