With the business potentially at an important milestone, we thought we'd take a closer look at Madrigal Pharmaceuticals, Inc.'s (NASDAQ:MDGL) future prospects. Madrigal Pharmaceuticals, Inc., a biopharmaceutical company, focuses on delivering novel therapeutics for metabolic dysfunction-associated steatohepatitis (MASH) in the United States. The US$6.6b market-cap company’s loss lessened since it announced a US$466m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$392m, as it approaches breakeven. Many investors are wondering about the rate at which Madrigal Pharmaceuticals will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

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According to the 14 industry analysts covering Madrigal Pharmaceuticals, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$23m in 2026. The company is therefore projected to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 65% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Madrigal Pharmaceuticals' growth isn’t the focus of this broad overview, but, take into account that by and large biotechs, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

Check out our latest analysis for Madrigal Pharmaceuticals

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 17% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Madrigal Pharmaceuticals, so if you are interested in understanding the company at a deeper level, take a look at Madrigal Pharmaceuticals' company page on Simply Wall St. We've also compiled a list of important aspects you should further examine:

1. Valuation: What is Madrigal Pharmaceuticals worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Madrigal Pharmaceuticals is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Madrigal Pharmaceuticals’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.