For an effective drug, strong binding to the target protein is a prerequisite, but it is not enough. To produce a particular functional response, drugs need to either block the proteins' functions or modulate their activities by changing their conformational equilibrium. The binding free energy of a compound to its target is routinely calculated, but the timescales for the protein conformational changes are prohibitively long to be efficiently modeled via physics-based simulations. Thermodynamic principles suggest that the binding free energies of the ligands with different receptor conformations may infer their efficacy. However, this hypothesis has not been thoroughly validated. We present an actionable protocol and a comprehensive study to show that binding thermodynamics provides a strong predictor of the efficacy of a ligand. We apply the absolute binding free energy perturbation method to ligands bound to active and inactive states of eight G protein-coupled receptors and a nuclear receptor and then compare the resulting binding free energies. We find that carefully designed restraints are often necessary to efficiently model the corresponding conformational ensembles for each state. Our method achieves unprecedented performance in classifying ligands as agonists or antagonists across the various investigated receptors, all of which are important drug targets.