Financial Analysis: Madrigal Pharmaceuticals (NASDAQ:MDGL) and MacroGenics (NASDAQ:MGNX)

Madrigal Pharmaceuticals (NASDAQ:MDGL) and MacroGenics (NASDAQ:MGNX) are both healthcare companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, risk, dividends, earnings and valuation.

Profitability

This table compares Madrigal Pharmaceuticals and MacroGenics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Madrigal Pharmaceuticals	-25.32%	-56.65%	-25.53%
MacroGenics	-8.70%	-109.26%	-18.70%

Analyst Recommendations

This is a summary of recent ratings and target prices for Madrigal Pharmaceuticals and MacroGenics, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Madrigal Pharmaceuticals	1	2	15	0	2.78
MacroGenics	1	3	2	0	2.17

Madrigal Pharmaceuticals presently has a consensus target price of $710.20, suggesting a potential upside of 43.88%. MacroGenics has a consensus target price of $6.33, suggesting a potential upside of 67.99%. Given MacroGenics’ higher probable upside, analysts plainly believe MacroGenics is more favorable than Madrigal Pharmaceuticals.

Valuation & Earnings

This table compares Madrigal Pharmaceuticals and MacroGenics”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Madrigal Pharmaceuticals	$958.40 million	11.90	-$288.28 million	($12.89)	-38.29
MacroGenics	$149.50 million	1.61	-$74.62 million	($0.22)	-17.14

MacroGenics has lower revenue, but higher earnings than Madrigal Pharmaceuticals. Madrigal Pharmaceuticals is trading at a lower price-to-earnings ratio than MacroGenics, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Madrigal Pharmaceuticals has a beta of -1.04, suggesting that its share price is 204% less volatile than the S&P 500. Comparatively, MacroGenics has a beta of 1.2, suggesting that its share price is 20% more volatile than the S&P 500.

Institutional and Insider Ownership

98.5% of Madrigal Pharmaceuticals shares are owned by institutional investors. Comparatively, 96.9% of MacroGenics shares are owned by institutional investors. 17.6% of Madrigal Pharmaceuticals shares are owned by company insiders. Comparatively, 13.6% of MacroGenics shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

About Madrigal Pharmaceuticals

Madrigal Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company, focuses on the development of therapeutics for the treatment of non-alcoholic steatohepatitis (NASH) in the United States. Its lead product candidate is resmetirom, a liver-directed thyroid hormone receptor beta agonist, which is in Phase 3 clinical trials for treating NASH. The company is headquartered in West Conshohocken, Pennsylvania.

About MacroGenics

MacroGenics, Inc., a biopharmaceutical company, develops, manufactures, and commercializes antibody-based therapeutics to treat cancer in the United States. Its approved product is MARGENZA (margetuximab-cmkb), a human epidermal growth factor receptor 2 (HER2) receptor antagonist indicated, in combination with chemotherapy, for the treatment of adult patients with metastatic HER2-positive breast cancer who have received two or more prior anti-HER2 regimens. The company's pipeline of immuno-oncology product candidates includes MGC018, an antibody drug conjugate (ADC), which targets solid tumors expressing B7-H3; Enoblituzumab, a monoclonal antibody that targets B7-H3; and MGD024, an investigational bispecific CD123 × CD3 DART molecule to minimize cytokine-release syndrome for patients with hematologic malignancies. In addition, it develops Lorigerlimab, a monoclonal antibody that targets the immune checkpoints PD-1 and cytotoxic T-lymphocyte-associated protein 4; Tebotelimab, an investigational tetravalent DART molecule for PD-1 and lymphocyte-activation gene 3; Retifanlimab, a humanized monoclonal antibody targeting programmed death receptor-1; and IMGC936, an ADC that targets ADAM9, a cell surface protein over-expressed in various solid tumor types. Further, the company develops MGD014 and MGD020, a DART molecule to target the envelope protein of human immunodeficiency virus infected cells and CD3 on T cells; Teplizumab for the treatment of type 1 diabetes; and PRV-3279, a CD32B × CD79B DART molecule for the treatment of autoimmune indications. It has collaborations with Incyte Corporation; Zai Lab Limited; I-Mab Biopharma; and Janssen Biotech, Inc. The company was incorporated in 2000 and is headquartered in Rockville, Maryland.