Critical Analysis: Ironwood Pharmaceuticals (IRWD) vs. Its Peers

Ironwood Pharmaceuticals (NASDAQ:IRWD) is one of 247 publicly-traded companies in the “MED – DRUGS” industry, but how does it weigh in compared to its competitors? We will compare Ironwood Pharmaceuticals to related companies based on the strength of its analyst recommendations, institutional ownership, dividends, risk, profitability, valuation and earnings.

Institutional and Insider Ownership

43.9% of shares of all “MED – DRUGS” companies are held by institutional investors. 12.7% of Ironwood Pharmaceuticals shares are held by company insiders. Comparatively, 13.2% of shares of all “MED – DRUGS” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Ironwood Pharmaceuticals and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ironwood Pharmaceuticals	8.11%	-13.72%	10.95%
Ironwood Pharmaceuticals Competitors	-22,657.13%	-141.40%	-22.30%

Risk & Volatility

Ironwood Pharmaceuticals has a beta of 0.17, meaning that its share price is 83% less volatile than the S&P 500. Comparatively, Ironwood Pharmaceuticals’ competitors have a beta of 2.78, meaning that their average share price is 178% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for Ironwood Pharmaceuticals and its competitors, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ironwood Pharmaceuticals	1	3	2	1	2.43
Ironwood Pharmaceuticals Competitors	2813	4036	10305	466	2.48

Ironwood Pharmaceuticals currently has a consensus target price of $6.23, indicating a potential upside of 40.20%. As a group, “MED – DRUGS” companies have a potential upside of 49.12%. Given Ironwood Pharmaceuticals’ competitors stronger consensus rating and higher possible upside, analysts clearly believe Ironwood Pharmaceuticals has less favorable growth aspects than its competitors.

Valuation & Earnings

This table compares Ironwood Pharmaceuticals and its competitors revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Ironwood Pharmaceuticals	$296.15 million	$24.02 million	34.20
Ironwood Pharmaceuticals Competitors	$30.54 billion	$99.19 million	-4.61

Ironwood Pharmaceuticals’ competitors have higher revenue and earnings than Ironwood Pharmaceuticals. Ironwood Pharmaceuticals is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Summary

Ironwood Pharmaceuticals competitors beat Ironwood Pharmaceuticals on 8 of the 13 factors compared.

Ironwood Pharmaceuticals Company Profile

Ironwood Pharmaceuticals, Inc., a healthcare company, focuses on the development and commercialization of gastrointestinal (GI) products. It markets linaclotide, a guanylate cyclase type-C (GC-C) agonist for the treatment of adults suffering from irritable bowel syndrome with constipation or chronic idiopathic constipation under the LINZESS name in the United States, Mexico, Japan, Saudi Arabia, and China, as well as under the CONSTELLA name in the Canada and European countries. The company is also developing IW-3300, a GC-C agonist for the treatment of visceral pain conditions, including interstitial cystitis/bladder pain syndrome and endometriosis; Apraglutide, a next-generation, long-acting synthetic peptide analog of glucagon-like peptide-2, as a differentiated therapeutic for rare diseases, including short bowel syndrome dependent on parenteral support and acute graft versus host disease; and CNP-104, an immune nanoparticle for the treatment of primary biliary cholangitis. The company has strategic partnerships with AbbVie Inc., AstraZeneca AB, and Astellas Pharma Inc. for the development and commercialization of linaclotide. The company was formerly known as Microbia, Inc. and changed its name to Ironwood Pharmaceuticals, Inc. in April 2008. Ironwood Pharmaceuticals, Inc. was incorporated in 1998 and is headquartered in Boston, Massachusetts.