Is Madrigal Pharmaceuticals, Inc. overvalued or undervalued?

As of 7 August 2024, Madrigal Pharmaceuticals, Inc. has moved from a grade of "does not qualify" to "risky." The company is currently overvalued, reflected in its high price-to-book value of 8.69 and negative EV to EBIT and EV to EBITDA ratios of -12.82 and -12.86, respectively. Additionally, the return on equity (ROE) stands at a concerning -55.10%, indicating significant losses relative to shareholder equity.
In comparison to its peers, Madrigal's P/E ratio of -15.85 is less favorable than Insmed, Inc., which has a P/E of -21.43, but significantly worse than Corcept Therapeutics, Inc., which is considered expensive with a P/E of 60.68. The company's recent stock performance has also lagged behind the S&P 500, with a year-to-date return of -8.29% compared to the index's 2.44%. Overall, these metrics suggest that Madrigal Pharmaceuticals is overvalued in the current market environment.