It has been about a month since the last earnings report for Madrigal (MDGL Quick QuoteMDGL - Free Report) . Shares have added about 1% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Madrigal due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Madrigal Q2 Earnings Top, NASH Drug Drives Top Line

Madrigalreported a loss of $7.10 per share in second-quarter 2024, narrower than the Zacks Consensus Estimate of a loss of $7.55. In the year-ago quarter, the company reported a loss of $4.69.

During the quarter, the company generated total revenues of $14.6 million — entirely from product sales of Rezdiffra, driven by early patient demand. The metric beat the Zacks Consensus Estimate of $3.8 million. Since this is also the first marketed drug in Madrigal’s portfolio, management did not generate any sales in the year-ago period.

Quarter in Detail

During the quarter, research and development (R&D) expenses increased 4% to $71.1 million. This uptick was primarily due to an increase related to the timing of manufacturing, headcount and stock compensation expenses.

Selling, general and administrative expenses were $105.4 million in the reported quarter compared with $17.8 million in the year-ago period. This exponential rise was on account of increases in commercial preparation activities for the launch of Rezdiffra, including significant commercial headcount expansion and stock compensation expense.

Madrigal had cash, cash equivalents and marketable securities worth $1.1 billion as of June 30, 2024, which was in line with the balance reported as of March 31, 2024.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month.

The consensus estimate has shifted -8.9% due to these changes.

VGM Scores

Currently, Madrigal has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Madrigal has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Madrigal is part of the Zacks Medical - Drugs industry. Over the past month, Theravance Biopharma (TBPH Quick QuoteTBPH - Free Report) , a stock from the same industry, has gained 6.4%. The company reported its results for the quarter ended June 2024 more than a month ago.

Theravance Bio reported revenues of $14.26 million in the last reported quarter, representing a year-over-year change of +3.7%. EPS of -$0.13 for the same period compares with -$0.13 a year ago.

Theravance Bio is expected to post a loss of $0.10 per share for the current quarter, representing a year-over-year change of -900%. Over the last 30 days, the Zacks Consensus Estimate has changed -14.9%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Theravance Bio. Also, the stock has a VGM Score of F.