DB:I76

Stock Analysis Report

Executive Summary

Ironwood Pharmaceuticals, Inc., a healthcare company, focuses on the development and commercialization of gastrointestinal (GI) products.

Rewards

Trading at 32.9% below its fair value

Earnings are forecast to grow 17.5% per year

Became profitable this year

Risk Analysis

Debt is not well covered by operating cash flow

High level of non-cash earnings

Highly volatile share price over past 3 months

Shareholders have been diluted in the past year



Snowflake Analysis

Reasonable growth potential and fair value.


Similar Companies

Share Price & News

How has Ironwood Pharmaceuticals's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: I76's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

2.8%

I76

-0.7%

DE Biotechs

-0.6%

DE Market


1 Year Return

-17.0%

I76

-13.2%

DE Biotechs

-20.9%

DE Market

Return vs Industry: I76 underperformed the German Biotechs industry which returned -13.2% over the past year.

Return vs Market: I76 exceeded the German Market which returned -20.9% over the past year.


Shareholder returns

I76IndustryMarket
7 Day2.8%-0.7%-0.6%
30 Day-17.1%-12.1%-20.0%
90 Day-21.4%-22.3%-26.3%
1 Year-17.0%-17.0%-13.0%-13.2%-18.6%-20.9%
3 Year-40.4%-40.4%14.5%13.2%-19.0%-25.8%
5 Year-34.8%-34.8%-9.5%-11.8%-21.1%-31.8%

Price Volatility Vs. Market

How volatile is Ironwood Pharmaceuticals's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Ironwood Pharmaceuticals undervalued compared to its fair value and its price relative to the market?

32.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: I76 (€9.2) is trading below our estimate of fair value (€13.71)

Significantly Below Fair Value: I76 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: I76 is good value based on its PE Ratio (26.1x) compared to the Biotechs industry average (40.7x).

PE vs Market: I76 is poor value based on its PE Ratio (26.1x) compared to the German market (16.6x).


Price to Earnings Growth Ratio

PEG Ratio: I76 is poor value based on its PEG Ratio (1.5x)


Price to Book Ratio

PB vs Industry: I76 has negative assets, so we can't compare its PB Ratio to the DE Biotechs industry average.


Next Steps

Future Growth

How is Ironwood Pharmaceuticals forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

17.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: I76's forecast earnings growth (17.5% per year) is above the savings rate (-0.4%).

Earnings vs Market: I76's earnings (17.5% per year) are forecast to grow faster than the German market (14.1% per year).

High Growth Earnings: I76's earnings are forecast to grow, but not significantly.

Revenue vs Market: I76's revenue (6.4% per year) is forecast to grow faster than the German market (3.9% per year).

High Growth Revenue: I76's revenue (6.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: I76's Return on Equity is forecast to be very high in 3 years time (61.9%).


Next Steps

Past Performance

How has Ironwood Pharmaceuticals performed over the past 5 years?

4.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: I76 has a high level of non-cash earnings.

Growing Profit Margin: I76 became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: I76 has become profitable over the past 5 years, growing earnings by 4.8% per year.

Accelerating Growth: I76 has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: I76 has become profitable in the last year, making it difficult to compare its past year earnings growth to the Biotechs industry (16.1%).


Return on Equity

High ROE: I76's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.


Next Steps

Financial Health

How is Ironwood Pharmaceuticals's financial position?


Financial Position Analysis

Short Term Liabilities: I76 has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: I76 has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.


Debt to Equity History and Analysis

Debt Level: I76 has negative shareholder equity, which is a more serious situation than a high debt level.

Reducing Debt: I76's has negative shareholder equity, so we do not need to check if its debt has reduced over time.


Balance Sheet

Inventory Level: I76 has a low level of unsold assets or inventory.

Debt Coverage by Assets: I76 has negative shareholder equity (liabilities exceed assets) therefore debt is not covered by short term assets.


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: I76 is profitable, therefore cash runway is not a concern.

Forecast Cash Runway: I76 is profitable, therefore cash runway is not a concern.


Next Steps

Dividend

What is Ironwood Pharmaceuticals's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate I76's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate I76's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if I76's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if I76's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of I76's dividend in 3 years as they are not forecast to pay a notable one for the German market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.0yrs

Average management tenure


CEO

Mark Mallon (56yo)

1

Tenure

Mr. Mark Mallon has been chief executive officer at Ironwood Pharmaceuticals, Inc. since April 01, 2019 and serves as its Director and served as its Executive Senior Adviser since January 4, 2019. Mr. Ma ...


Leadership Team

NamePositionTenureCompensationOwnership
Thomas McCourt
President1.25yrsUS$2.15m0.038% $552.2k
Gina Consylman
CFO, Senior VP & Treasurerno dataUS$1.91m0.037% $538.3k
Mark Mallon
CEO & Director1yrno data0.0097% $139.8k
Brian Cali
Co-Founder and Senior VP of R&D Strategy & External Innovation3yrsno datano data
G. Milne
Co-Founder and VP of sGC R&D22.25yrsno datano data
Kelly MacDonald
Chief Accounting Officer & VP of Finance0.75yrno data0.043% $616.6k
Halley Gilbert
Senior VP of Corporate Development & Chief Administrative Officerno dataUS$1.93m0.068% $985.1k
Meredith Kaya
Vice President of Investor Relations & Corporate Communicationsno datano datano data
Jonathan Rosin
Senior Vice President of Human Resources8.25yrsno datano data
Christopher Wright
Chief Development Officer & Senior VP of Global Development3yrsUS$4.14kno data

3.0yrs

Average Tenure

52.5yo

Average Age

Experienced Management: I76's management team is considered experienced (3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Mark Mallon
CEO & Director1yrno data0.0097% $139.8k
Lawrence Olanoff
Independent Director5yrsUS$307.67k0.037% $532.9k
Perry Halushka
Member of Pharmaceuticals Advisory Committeeno datano datano data
Mark Currie
Director1yrUS$2.45m0.35% $5.0m
Edward Owens
Independent Director7.08yrsUS$311.42k0.12% $1.7m
Andrew Dreyfus
Independent Director4yrsUS$301.42k0.055% $795.3k
Michael Mendelsohn
Member of Pharmaceutical Advisory Committee3.17yrsno datano data
Catherine Moukheibir
Independent Director1yrno data0.016% $235.2k
Julie McHugh
Chairman of the Boardno dataUS$311.42k0.069% $1.0m
Jon Duane
Independent Director1yrno data0.016% $235.2k

2.2yrs

Average Tenure

60yo

Average Age

Experienced Board: I76's board of directors are not considered experienced ( 2.2 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.2%.


Top Shareholders

Company Information

Ironwood Pharmaceuticals, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Ironwood Pharmaceuticals, Inc.
  • Ticker: I76
  • Exchange: DB
  • Founded: 1998
  • Industry: Biotechnology
  • Sector: Pharmaceuticals & Biotech
  • Market Cap: US$1.562b
  • Listing Market Cap: US$1.447b
  • Shares outstanding: 158.21m
  • Website: https://www.ironwoodpharma.com

Number of Employees


Location

  • Ironwood Pharmaceuticals, Inc.
  • 100 Summer Street
  • Suite 2300
  • Boston
  • Massachusetts
  • 2110
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
IRWDNasdaqGS (Nasdaq Global Select)YesClass A Common StockUSUSDFeb 2010
I76DB (Deutsche Boerse AG)YesClass A Common StockDEEURFeb 2010

Biography

Ironwood Pharmaceuticals, Inc., a healthcare company, focuses on the development and commercialization of gastrointestinal (GI) products. The company markets linaclotide, a guanylate cyclase type-C agonist for the treatment of adults suffering from irritable bowel syndrome with constipation (IBS-C) or chronic idiopathic constipation (CIC) under the LINZESS name in the United States and CONSTELLA name in the Canada and European Union; MD-7246, an oral, intestinal, non-opioid, pain-relieving agent for patients suffering from abdominal pain associated with GI diseases; and IW 3718, a gastric retentive formulation of a bile acid sequestrant, which is in Phase III clinical trials for the treatment of GERD. Ironwood Pharmaceuticals, Inc. has collaboration agreements with Allergan plc and AstraZeneca AB to develop and commercialize linaclotide for the treatment of IBS-C, CIC, and other gastrointestinal (GI) conditions in North America, China, Hong Kong, Macau, and Japan, as well as a license agreement with Astellas Pharma Inc. to develop and commercialize linaclotide for the treatment of IBS-C, CIC, and other GI conditions in Japan. The company was formerly known as Microbia, Inc. and changed its name to Ironwood Pharmaceuticals, Inc. in April 2008. Ironwood Pharmaceuticals, Inc. was founded in 1998 and is headquartered in Boston, Massachusetts. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/04 00:37
End of Day Share Price2020/04/03 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.