Comparing Madrigal Pharmaceuticals (NASDAQ:MDGL) and Incyte (NASDAQ:INCY)

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

Risk & Volatility

Madrigal Pharmaceuticals has a beta of -1.04, meaning that its stock price is 204% less volatile than the S&P 500. Comparatively, Incyte has a beta of 0.74, meaning that its stock price is 26% less volatile than the S&P 500.

Profitability

This table compares Madrigal Pharmaceuticals and Incyte’s 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%
Incyte	27.71%	29.93%	22.88%

Valuation and Earnings

This table compares Madrigal Pharmaceuticals and Incyte”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Madrigal Pharmaceuticals	$958.40 million	11.27	-$288.28 million	($12.89)	-36.27
Incyte	$5.14 billion	4.60	$1.29 billion	$7.85	14.85

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

Insider and Institutional Ownership

98.5% of Madrigal Pharmaceuticals shares are held by institutional investors. Comparatively, 97.0% of Incyte shares are held by institutional investors. 17.6% of Madrigal Pharmaceuticals shares are held by insiders. Comparatively, 16.2% of Incyte shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Madrigal Pharmaceuticals and Incyte, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Madrigal Pharmaceuticals	1	2	15	0	2.78
Incyte	1	12	11	1	2.48

Madrigal Pharmaceuticals currently has a consensus target price of $699.20, indicating a potential upside of 49.55%. Incyte has a consensus target price of $129.33, indicating a potential upside of 10.91%. Given Madrigal Pharmaceuticals’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Madrigal Pharmaceuticals is more favorable than Incyte.

Summary

Incyte beats Madrigal Pharmaceuticals on 9 of the 15 factors compared between the two stocks.

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 Incyte

Incyte Corporation, a biopharmaceutical company, engages in the discovery, development, and commercialization of therapeutics for hematology/oncology, and inflammation and autoimmunity areas in the United States and internationally. The company offers JAKAFI (ruxolitinib) for treatment of intermediate or high-risk myelofibrosis, polycythemia vera, and steroid-refractory acute graft-versus-host disease; MONJUVI (tafasitamab-cxix)/MINJUVI (tafasitamab) for relapsed or refractory diffuse large B-cell lymphoma; PEMAZYRE (pemigatinib), a fibroblast growth factor receptor kinase inhibitor that act as oncogenic drivers in liquid and solid tumor types; ICLUSIG (ponatinib) to treat chronic myeloid leukemia and Philadelphia-chromosome positive acute lymphoblastic leukemia; and ZYNYZ (retifanlimab-dlwr) to treat adults with metastatic or recurrent locally advanced Merkel cell carcinoma, as well as OPZELURA cream for treatment of atopic dermatitis. Its clinical stage products include retifanlimab under Phase 3 clinical trials for squamous cell carcinoma of the anal canal and non-small cell lung cancer; axatilimab, an anti-CSF-1R monoclonal antibody under Phase 2 that is being developed as a therapy for patients with chronic GVHD; INCA033989 to inhibit oncogenesis; INCB160058, which is being developed as a disease-modifying therapeutic; and INCB99280 and INCB99318 for the treatment solid tumors. The company also develops INCB123667, INCA32459, and INCA33890, as well as Ruxolitinib cream, Povorcitinib, and INCA034460. It has collaboration out-license agreements with Novartis and Lilly; in-license agreements with Agenus, Merus, MacroGenics, and Syndax; and collaboration and license agreement with China Medical System Holdings Limited for the development and commercialization of povorcitinib. The company sells its products to specialty, retail, and hospital pharmacies, distributors, and wholesalers. The company was formerly known as Incyte Genomics Inc and changed its name to Incyte Corporation in March 2003. Incyte Corporation was incorporated in 1991 and is headquartered in Wilmington, Delaware.