Last Update 20 Dec 25

Fair value Increased 7.04%

MDGL: Future Leadership Will Depend On Cirrhosis Uptake Amid GLP 1 Competition

The analyst price target for Madrigal Pharmaceuticals has been raised by approximately $40 per share, as analysts cite stronger-than-expected real-world uptake of Rezdiffra, expanded penetration assumptions across F2, F3, and emerging F4c populations, and increased confidence in the drug's long-term commercial trajectory despite GLP-1 competition.

Analyst Commentary

Recent Street research reflects a strongly constructive tone on Madrigal Pharmaceuticals, with multiple firms lifting price targets into the mid to high $500s and $600s range, underpinned by faster than expected Rezdiffra adoption and expanding addressable populations across F2, F3, and emerging F4c disease.

Bullish Takeaways

Bullish analysts highlight robust real world Rezdiffra uptake in high volume centers, noting current F2/F3 penetration already exceeding 20 percent. They view this as supportive of upside to long term penetration and revenue assumptions.
Several models now embed materially higher contribution from F4 and compensated cirrhosis populations, with some peak sales estimates for MASH F4 doubling. This directly supports higher price targets and an extended growth duration into the next decade.
Updates from recent liver disease conferences are viewed as strengthening Rezdiffra's clinical profile and positioning it as a backbone oral therapy in future combination regimens. Bullish analysts believe this will help defend share even as GLP 1 competitors enter the market.
Stronger than expected quarterly results, improving visibility on a 2026 profitability inflection, and an impending EU launch have prompted multiple upward revisions to revenue and margin trajectories. This underpins confidence in both execution and medium term valuation re rating potential.

Bearish Takeaways

More cautious analysts point to intensifying competition from GLP 1 based weight loss therapies, which could cap Rezdiffra's ultimate penetration in earlier stage F2 F3 disease and introduce pricing pressure. This may limit upside to current valuation.
There is lingering uncertainty around the long term shape of the MASH treatment landscape, particularly how combination regimens will be sequenced and reimbursed. This could challenge current assumptions that Rezdiffra remains the default oral backbone therapy.
While Street models increasingly factor in meaningful F4c and cirrhosis contributions, execution risk remains around regulatory paths, real world tolerability, and payer adoption in these higher risk populations. This leaves room for disappointment versus elevated expectations.
Some investors remain focused on strategic optionality, including potential business development or corporate combinations, and see the absence of near term M and A as a constraint on multiple expansion relative to peers with larger commercial infrastructures.

What's in the News

New two year data from the open label F4c arm of Phase 3 MAESTRO NAFLD 1 showed statistically significant improvements across imaging and biomarker measures in compensated MASH cirrhosis patients treated with Rezdiffra, reinforcing the drug's potential in advanced disease with no approved therapies (AASLD The Liver Meeting).
In the same F4c cohort, 113 of 122 patients completed two years of Rezdiffra treatment, with additional improvements observed even in more advanced patients with platelet counts at or below 100,000 per microliter, highlighting durability and breadth of benefit in a difficult to treat population (AASLD The Liver Meeting).
Madrigal reported multiple new Rezdiffra and MASH data presentations from the Phase 3 MAESTRO program, including analyses from MAESTRO NAFLD 1 and MAESTRO NASH, further detailing the drug's impact on fibrosis, MASH resolution, liver stiffness, liver fat, liver enzymes, and atherogenic lipids (AASLD The Liver Meeting).
Updated MAESTRO NASH biopsy trial results confirmed that Rezdiffra met both primary endpoints of fibrosis improvement and MASH resolution, with 91 percent of patients on 100 mg achieving improvement or stabilization of liver stiffness at one year as measured by VCTE, a key tool for real world monitoring (MAESTRO NASH Phase 3 data).
Madrigal reiterated that Rezdiffra, a once daily oral THR beta agonist and the first approved MASH therapy in the U.S. and Europe for noncirrhotic F2 F3 disease, remains under ongoing confirmatory trials and is not yet approved for cirrhosis. This regulatory nuance is closely watched by investors focused on F4c upside (company product update).

Valuation Changes

Fair Value has risen moderately from $563.80 to approximately $603.47 per share, reflecting a higher long term earnings outlook for Rezdiffra.
Discount Rate has increased slightly from about 7.05 percent to 7.06 percent, implying a marginally higher required return on Madrigal shares.
Revenue Growth assumptions have risen slightly from roughly 54.61 percent to 54.88 percent, indicating a modestly stronger top line trajectory.
Net Profit Margin has declined modestly from about 33.46 percent to 31.99 percent, suggesting higher expected costs or more conservative profitability assumptions.
Future P/E has increased meaningfully from around 18.1x to 20.2x, signaling a higher valuation multiple applied to Madrigal's forward earnings.

Decades of patent protection and growing disease prevalence position Rezdiffra for sustained revenue growth, market expansion, and pricing power.
International launches, pipeline diversification, and solid financial resources reduce risk and support expansion into new markets and indications.
Dependence on a single drug, rising competition, reimbursement challenges, expansion risks, and escalating costs threaten Madrigal's margins, growth prospects, and earnings stability.

Catalysts

About Madrigal Pharmaceuticals

A biopharmaceutical company, focuses on delivering novel therapeutics for metabolic dysfunction-associated steatohepatitis (MASH) in the United States.What are the underlying business or industry changes driving this perspective?

The rapid uptake and long-term patent protection of Rezdiffra, supported by a new U.S. patent that extends exclusivity to 2045, provides decades of protected revenue opportunity; this increases the likelihood of sustained top-line growth and supports margin expansion due to extended pricing power.
The increasing global prevalence of advanced metabolic and liver diseases, driven by aging populations and lifestyle trends, is expanding the addressable market for Rezdiffra; the company's early-stage penetration (7% of diagnosed U.S. MASH patients) leaves significant room for future patient growth and recurring revenues.
Upcoming international expansion, beginning with the imminent launch in Germany and broader EU approval, positions the company to tap into new, underpenetrated markets with a sizeable diagnosed MASH population and limited competition, driving incremental revenue growth.
Pipeline development, including the combination of Rezdiffra with a newly in-licensed oral GLP-1 agent, leverages advances in targeted metabolic therapies and positions Madrigal for future indication expansion and combination treatment adoption-supporting long-term revenue diversification and lifecycle management.
The company's strong cash reserves and favorable non-dilutive financing provide ample resources for business development, clinical advancement, and scaling operations, reducing financial risk and supporting investment in initiatives likely to boost future net income and earnings stability.

Madrigal Pharmaceuticals Earnings and Revenue Growth

Madrigal Pharmaceuticals Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Madrigal Pharmaceuticals's revenue will grow by 68.6% annually over the next 3 years.
Analysts assume that profit margins will increase from -54.7% today to 33.3% in 3 years time.
Analysts expect earnings to reach $822.9 million (and earnings per share of $31.0) by about September 2028, up from $-281.9 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $1.1 billion in earnings, and the most bearish expecting $291.0 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 15.7x on those 2028 earnings, up from -34.4x today. This future PE is greater than the current PE for the US Biotechs industry at 15.5x.
Analysts expect the number of shares outstanding to grow by 2.19% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 6.78%, as per the Simply Wall St company report.

Madrigal Pharmaceuticals Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Heavy reliance on a single lead asset (Rezdiffra/resmetirom) exposes Madrigal to substantial risk if future clinical data (e.g., in F4c population) disappoint or if unforeseen safety/efficacy issues emerge, potentially resulting in significant revenue and earnings volatility.
Intensifying competition-including upcoming launches of GLP-1 class drugs and pipeline therapies from large-cap pharma-could erode Madrigal's first-mover advantage, put downward pressure on market share, and force pricing or rebating concessions, impacting both top-line growth and net margins.
Continued healthcare cost containment and reimbursement scrutiny-especially as payer contracting ramps up in the second half of 2025 and beyond-may drive gross to net discounts higher over time, limiting long-term pricing power and compressing future gross and net margins.
International expansion carries operational and reimbursement risks, especially in complex European markets where access, pricing, and adoption curves may be slower or flatter than in the U.S., delaying or diminishing expected revenue contributions from ex-U.S. launches.
High and rising SG&A and R&D expenses-particularly as Madrigal builds its pipeline and business development ambitions-could pressure operating margins and require further external financing, raising the risk of future shareholder dilution or elevated interest expense, negatively affecting long-term earnings per share.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $461.429 for Madrigal Pharmaceuticals based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $567.0, and the most bearish reporting a price target of just $266.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $2.5 billion, earnings will come to $822.9 million, and it would be trading on a PE ratio of 15.7x, assuming you use a discount rate of 6.8%.
Given the current share price of $435.27, the analyst price target of $461.43 is 5.7% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

EU Expansion and Combination Therapies Will Drive Future Opportunity