Financial Survey: Vertex Pharmaceuticals (NASDAQ:VRTX) versus Madrigal Pharmaceuticals (NASDAQ:MDGL)

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

Volatility and Risk

Vertex Pharmaceuticals has a beta of 0.32, meaning that its share price is 68% less volatile than the S&P 500. Comparatively, Madrigal Pharmaceuticals has a beta of -0.98, meaning that its share price is 198% less volatile than the S&P 500.

Institutional and Insider Ownership

91.0% of Vertex Pharmaceuticals shares are owned by institutional investors. Comparatively, 98.5% of Madrigal Pharmaceuticals shares are owned by institutional investors. 0.2% of Vertex Pharmaceuticals shares are owned by company insiders. Comparatively, 17.6% of Madrigal Pharmaceuticals shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings for Vertex Pharmaceuticals and Madrigal Pharmaceuticals, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vertex Pharmaceuticals	0	2	20	1	2.96
Madrigal Pharmaceuticals	1	2	15	0	2.78

Vertex Pharmaceuticals presently has a consensus price target of $569.52, indicating a potential upside of 7.08%. Madrigal Pharmaceuticals has a consensus price target of $699.64, indicating a potential upside of 30.32%. Given Madrigal Pharmaceuticals’ higher possible upside, analysts clearly believe Madrigal Pharmaceuticals is more favorable than Vertex Pharmaceuticals.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vertex Pharmaceuticals	$12.00 billion	11.25	$3.95 billion	$17.18	30.96
Madrigal Pharmaceuticals	$958.40 million	12.94	-$288.28 million	($12.89)	-41.65

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Vertex Pharmaceuticals	35.00%	23.09%	16.72%
Madrigal Pharmaceuticals	-25.32%	-56.65%	-25.53%

Summary

Vertex Pharmaceuticals beats Madrigal Pharmaceuticals on 11 of the 15 factors compared between the two stocks.

About Vertex Pharmaceuticals

Vertex Pharmaceuticals Incorporated, a biotechnology company, engages in developing and commercializing therapies for treating cystic fibrosis (CF). It markets TRIKAFTA/KAFTRIO for people with CF with at least one F508del mutation for 2 years of age or older; SYMDEKO/SYMKEVI for people with CF for 6 years of age or older; ORKAMBI for CF patients 1 year or older; and KALYDECO for the treatment of patients with 1 year or older who have CF with ivacaftor. The company's pipeline includes VX-522, a CFTR mRNA therapeutic designed to treat the underlying cause of CF, which is in Phase 1 clinical trial; VX-548, a non-opioid medicine for the treatment of acute and neuropathic pain which is in Phase 3 clinical trial; Exa-cel, for the treatment of sickle cell disease and transfusion-dependent beta thalassemia which is in Phase 2/3 clinical trial. In addition, it provides inaxaplin for the treatment of APOL1-mediated focal segmental glomerulosclerosis and co-morbidities, such as hypertension which is in single Phase 2/3; VX- 880 and VX-264, treatment for Type 1 Diabetes which is in Phase 1/2 clinical trial; VX-970, which is in Phase 2 clinical trial for the treatment of cancer; and VX-803 and VX-984 for treatment of cancer in Phase 1 clinical trial. Further, it sells the products to specialty pharmacy and specialty distributors in the United States, as well as retail pharmacies, hospitals, and clinics. Additionally, the company has collaborations with CRISPR Therapeutics AG.; Moderna, Inc.; Entrada Therapeutics, Inc.; Arbor Biotechnologies, Inc.; Mammoth Biosciences, Inc.; and Verve Therapeutics., as well as collaborations with Tevard Biosciences to develop novel tRNA-based therapies for duchenne muscular dystrophy. Vertex Pharmaceuticals Incorporated was founded in 1989 and is headquartered in Boston, Massachusetts.

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.