Ironwood Pharmaceuticals (NASDAQ:IRWD – Get Free Report) and Connect Biopharma (NASDAQ:CNTB – Get Free Report) are both small-cap healthcare companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, valuation, dividends, analyst recommendations, earnings and profitability.
Analyst Recommendations
This is a breakdown of recent ratings for Ironwood Pharmaceuticals and Connect Biopharma, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Ironwood Pharmaceuticals | 0 | 4 | 2 | 1 | 2.57 |
| Connect Biopharma | 1 | 0 | 7 | 0 | 2.75 |
Ironwood Pharmaceuticals currently has a consensus target price of $6.23, indicating a potential upside of 46.32%. Connect Biopharma has a consensus target price of $7.43, indicating a potential upside of 303.73%. Given Connect Biopharma’s stronger consensus rating and higher possible upside, analysts plainly believe Connect Biopharma is more favorable than Ironwood Pharmaceuticals.
Institutional & Insider Ownership
Profitability
This table compares Ironwood Pharmaceuticals and Connect Biopharma’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Ironwood Pharmaceuticals | 33.36% | -58.38% | 34.93% |
| Connect Biopharma | N/A | -165.41% | -121.58% |
Volatility & Risk
Ironwood Pharmaceuticals has a beta of 0.2, suggesting that its stock price is 80% less volatile than the S&P 500. Comparatively, Connect Biopharma has a beta of -0.23, suggesting that its stock price is 123% less volatile than the S&P 500.
Valuation & Earnings
This table compares Ironwood Pharmaceuticals and Connect Biopharma”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Ironwood Pharmaceuticals | $296.15 million | 2.38 | $24.02 million | $0.77 | 5.53 |
| Connect Biopharma | $60,000.00 | 1,931.08 | -$55.48 million | ($1.19) | -1.55 |
Ironwood Pharmaceuticals has higher revenue and earnings than Connect Biopharma. Connect Biopharma is trading at a lower price-to-earnings ratio than Ironwood Pharmaceuticals, indicating that it is currently the more affordable of the two stocks.
Summary
Ironwood Pharmaceuticals beats Connect Biopharma on 9 of the 15 factors compared between the two stocks.
About Ironwood Pharmaceuticals
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.
About Connect Biopharma
Connect Biopharma Holdings Limited, a clinical-stage biopharmaceutical company, engages in the development of therapies for the treatment of T cell-driven inflammatory diseases. The company is building a pipeline of small molecules and antibodies using functional T cell assays to screen and discover potent product candidates against validated immune targets. Its lead product candidate is rademikibart (formerly CBP-201), an antibody designed to target interleukin-4 receptor alpha, which is a validated target for the treatment of inflammatory diseases such as atopic dermatitis and asthma, currently under Phase 3 studies; and icanbelimod (formerly CBP-307), an oral small molecule Sphingosine 1-Phosphate Receptor 1 modulator, currently under Phase 2 clinical for the treatment of ulcerative colitis and Crohn's disease. The company was founded in 2012 and is based in San Diego, California.
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