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Madrigal (MDGL) Q4 Earnings: What's in Store for the Stock?

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Madrigal Pharmaceuticals, Inc. (MDGL - Free Report) is expected to report fourth-quarter 2017 results on April 2, after the market closes. 

Last quarter, Madrigal delivered a positive surprise of 19.05%.

Shares of the company have significantly outperformed the industry. While the stock has skyrocketed 768.7%, the industry has gained 0.1%.

 

Let’s see, how things are shaping up at the company this quarter.

Factors to Consider

Madrigal has no approved product in its portfolio. So, investors' complete focus on fourth-quarter earnings call will be revolving around its lead pipeline candidate, MGL-3196.

Madrigal’s lead pipeline candidate MGL-3196 is a liver-directed THR-ß agonist, currently under evaluation in a phase II study for the treatment of non-alcoholic steatohepatitis (NASH). In December 2017, the company announced that MGL-3196 achieved primary endpoints in the study demonstrating liver fat reduction by 30% when treated with the candidate in comparison to placebo at 12 weeks.

Additionally, the company is developing MGL-3196 for dyslipidemia, particularly genetic dyslipidemias such as familial hypercholesterolemia (FH) including both homozygous and heterozygous (HeFH) forms of the disease. A phase II study on HeFH is currently underway. Data from the HeFH trial is expected by early 2018.

Positive results will likely tend to support the initiation of phase III study on MGL-3196 for both the NASH and HeFH indications.

Earnings Whispers

Our proven model does not conclusively show that Madrigal is likely to beat on earnings this quarter. This is because a stock needs to have both — a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. But that is not the case here as you will see below.

Zacks ESP: Madrigal has an Earnings ESP of 0.00%. That is because the Most Accurate estimate as well as the Zacks Consensus Estimate are pegged at a loss of 68 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Madrigal carries a Zacks Rank #4 (Sell), which lowers the predictive power of ESP. Hence, we always caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

 

Stocks That Warrant a Look

Here are a couple of health care stocks with the right combination of elements to beat on earnings this time around:

Gemphire Therapeutics is expected to release fourth quarter 2017 results on Mar 21. The company has an Earnings ESP of +8.01% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Atara Biotherapeutics, Inc. (ATRA - Free Report) is expected to announce fourth-quarter results on Mar 8. The company has an Earnings ESP of +7.42% and a Zacks Rank #3.

Aptose Biosciences, Inc. (APTO - Free Report) is expected to release fourth-quarter financial numbers on Mar 27. The company has an Earnings ESP of +20.00% and a Zacks Rank of 3.

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