January 17, 2025
An estimates-beating set of preliminary financial numbers and two bullish analyst updates weren't enough to lift Madrigal Pharmaceuticals (NASDAQ: MDGL) stock out of the doldrums over the past few trading days. Investor expectations are clearly very high, as the company's share price had withered by nearly 20% week to date as of Friday before market open, according to data compiled by S&P Global Market Intelligence .
Madrigal unveiled those figures Monday morning. The company said that its preliminary results indicated it earned $100 million to $103 million in the fourth quarter from Rezdiffra, its treatment for metabolic dysfunction-associated steatohepatitis (MASH, a type of fatty liver disease).
Its full-year 2024 tally from the drug was pegged at $177 million to $180 million. At the end of the year, the company added, over 11,800 patients were taking the medication.
Both of those ranges easily topped the average analyst expectations. And several of those prognosticators were quick to wax bullish on the company's prospects. Goldman Sachs ' Andrea Tan reiterated her buy recommendation and $530 price target on the stock. Going a step further, Evercore ISI pundit Liisa Bayko raised her fair value assessment of the shares to $392 apiece (from $360) and kept her outperform (buy) rating intact.
So with these positive tailwinds behind Madrigal, it's a bit odd that investors sold out of the stock. I feel that they might be overly bullish about Rezdiffra's prospects, or impatient for the recently approved drug to post higher growth rates. Regardless, in my opinion this reaction isn't well justified, and it leaves the ambitious Madrigal dangling in bargain stock territory.
Before you buy stock in Madrigal Pharmaceuticals, consider this:
