Ovid Therapeutics (NASDAQ:OVID) vs. Madrigal Pharmaceuticals (NASDAQ:MDGL) Critical Review

Ovid Therapeutics (NASDAQ:OVID) and Madrigal Pharmaceuticals (NASDAQ:MDGL) are both medical companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, institutional ownership, dividends, valuation and profitability.

Volatility and Risk

Ovid Therapeutics has a beta of 0.3, suggesting that its stock price is 70% less volatile than the S&P 500. Comparatively, Madrigal Pharmaceuticals has a beta of -0.38, suggesting that its stock price is 138% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ovid Therapeutics	-5,142.56%	-39.24%	-26.19%
Madrigal Pharmaceuticals	N/A	-71.78%	-53.25%

Earnings & Valuation

This table compares Ovid Therapeutics and Madrigal Pharmaceuticals”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ovid Therapeutics	$390,000.00	117.22	-$52.34 million	($0.47)	-1.37
Madrigal Pharmaceuticals	N/A	N/A	-$373.63 million	($25.08)	-13.44

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Ovid Therapeutics and Madrigal Pharmaceuticals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ovid Therapeutics	0	1	5	1	3.00
Madrigal Pharmaceuticals	1	2	10	0	2.69

Ovid Therapeutics currently has a consensus target price of $4.03, suggesting a potential upside of 526.49%. Madrigal Pharmaceuticals has a consensus target price of $351.67, suggesting a potential upside of 4.29%. Given Ovid Therapeutics’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Ovid Therapeutics is more favorable than Madrigal Pharmaceuticals.

Institutional & Insider Ownership

72.2% of Ovid Therapeutics shares are held by institutional investors. Comparatively, 98.5% of Madrigal Pharmaceuticals shares are held by institutional investors. 13.3% of Ovid Therapeutics shares are held by company insiders. Comparatively, 22.8% of Madrigal Pharmaceuticals shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Ovid Therapeutics beats Madrigal Pharmaceuticals on 9 of the 13 factors compared between the two stocks.

About Ovid Therapeutics

Ovid Therapeutics Inc., a biopharmaceutical company, engages in the development of impactful medicines for patients and families with epilepsies and seizure-related neurological disorders in the United States. The company is developing soticlestat, a novel cholesterol 24 hydroxylase inhibitor, which is in Phase 3 clinical trials for the potential treatment of patients with resistant epilepsies; OV329, a GABA aminotransferase inhibitor which is in Phase 1 clinical trials for the treatment of seizures associated with tuberous sclerosis complex and infantile spasms; and OV350, a small molecule direct activator of the KCC2 transporter, which is in Phase 1 clinical trials for treating epilepsies. It also develops OV815, that focuses on the mutations associated with KIF1A-associated neurological disorder (KAND); OV888 (GV101), a highly selective rock2 inhibitor which is in Phase 1 double-blind multiple-ascending dose trial; OV825, has advanced to potential candidate lead identification for the rare neurodevelopmental condition HNRNPH2 (Bain Syndrome); and OV882, a short hairpin RNA gene therapy for the treatment of Angelman syndrome. The company has license and collaboration agreements with Healx, AstraZeneca AB, H. Lundbeck A/S, Northwestern University, and Graviton, as well as Marinus Pharmaceuticals, Inc. The company was incorporated in 2014 and is headquartered in New York, New York.

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.