Analysts Expect Breakeven For Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL) Before Long

Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Madrigal Pharmaceuticals, Inc., a biopharmaceutical company, focuses on delivering novel therapeutics for metabolic dysfunction-associated steatohepatitis (MASH) in the United States. The US$7.5b market-cap company announced a latest loss of US$466m on 31 December 2024 for its most recent financial year result. Many investors are wondering about the rate at which Madrigal Pharmaceuticals will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Consensus from 16 of the American Biotechs analysts is that Madrigal Pharmaceuticals is on the verge of breakeven. They expect the company to post a final loss in 2025, before turning a profit of US$84m in 2026. The company is therefore projected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 61% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Madrigal Pharmaceuticals' growth isn’t the focus of this broad overview, however, take into account that typically a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

See our latest analysis for Madrigal Pharmaceuticals

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 16% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Madrigal Pharmaceuticals to cover in one brief article, but the key fundamentals for the company can all be found in one place – Madrigal Pharmaceuticals' company page on Simply Wall St. We've also put together a list of important aspects you should further examine:

1. Valuation: What is Madrigal Pharmaceuticals worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Madrigal Pharmaceuticals is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Madrigal Pharmaceuticals’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks 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.