Relay Therapeutics(RLAY) ZACKS·2024-12-20 18:01Core Insights - The Zacks rating system is centered around the changing earnings picture of a company, which is tracked through the Zacks Consensus Estimate for EPS from sell-side analysts for current and future years [1][2] Earnings Estimate Revisions - Relay Therapeutics has seen a 10.4% increase in the Zacks Consensus Estimate over the past three months, indicating a positive trend in earnings estimates [6] - The upgrade to a Zacks Rank 2 (Buy) reflects an upward trend in earnings estimates, which is a significant factor influencing stock prices [9][10] Market Impact - Empirical research shows a strong correlation between earnings estimate revisions and near-term stock movements, suggesting that tracking these revisions can be beneficial for investment decisions [5][11] - Institutional investors often adjust their valuations based on earnings estimates, leading to significant price movements in stocks as they buy or sell based on these changes [11] Zacks Rating System - The Zacks rating system maintains a balanced approach with an equal proportion of 'buy' and 'sell' ratings across over 4000 stocks, with only the top 5% receiving a 'Strong Buy' rating [7] - The Zacks Rank stock-rating system has a proven track record, with Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [12] Future Earnings Outlook - Relay Therapeutics is expected to earn -$2.55 per share for the fiscal year ending December 2024, reflecting a year-over-year change of 8.6% [13] - The upgrade positions Relay Therapeutics in the top 20% of Zacks-covered stocks based on estimate revisions, suggesting potential for market-beating returns in the near term [15][16]