Ironwood Pharma (IRWD) AI Stock Analysis

• Market Cap: $150.85M
• Dividend Yield: N/A
• Average Volume (3M): 3.50M
• Price to Earnings (P/E): 85.8
• Beta (1Y): 0.68
• Revenue Growth: -20.63%
• EPS Growth: N/A
• Country: US
• Employees: 253
• Sector: Healthcare
• Sector Strength: 60
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): N/A
• Shares Outstanding: 161,809,430
• 10 Day Avg. Volume: 2,431,904
• 30 Day Avg. Volume: 3,500,672
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 8.10
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 3.61
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $0.90
• Price Target Upside: -3.23% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 6

Ironwood Pharma's stock score is primarily influenced by financial recovery and cash flow stability, balanced by high leverage and valuation concerns. The technical outlook is weak, with bearish signals persisting. Earnings call insights and corporate changes provide mixed implications for future performance.

Positive Factors

Earnings Guidance

IRWD raised FY25 Adjusted EBITDA guidance by ~$20M to $105M+ driven by expectation of lower commercial spend related to the Apra launch.

Strategic Options

Ironwood Pharmaceuticals is exploring strategic options such as partnerships and mergers, indicating potential challenges in its current strategy.

Negative Factors

Debt and Cash Flow

The high debt load and delay in apraglutide's revenue contribution mean there will likely be no meaningful revenue contribution until after Linzess' loss of exclusivity and debt maturity.

Financial Uncertainty

An additional confirmatory Phase 3 trial for apraglutide in short bowel syndrome is needed for approval, adding financial uncertainty to the company.

Revenue Impact

1Q25 US Linzess revenues of ~$139M (-45% y/y) primarily reflects headwind from change in ABBVs GtN rebate reserves estimates.

Ironwood Pharma Business Overview & Revenue Model

Company Description

Ironwood Pharmaceuticals, Inc., a healthcare company, focuses on the development and commercialization of gastrointestinal (GI) products. It 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 Mexico, as well as under the CONSTELLA name in the Canada and European Union. 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; and CNP-104, an immune nanoparticle for the treatment of 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.

How the Company Makes Money

Ironwood Pharmaceuticals generates revenue primarily through the sales of its flagship product, LINZESS, which it markets in collaboration with Allergan, now a part of AbbVie. The company earns a significant portion of its income from product sales in the United States, leveraging its co-promotion agreement with Allergan. Additionally, Ironwood receives royalties from out-licensed sales of linaclotide in other territories, contributing to its global revenue streams. The company's earnings are also supported by milestone payments and licensing fees from partnerships and collaborations aimed at expanding the reach and applications of its GI therapies.

Ironwood Pharma Financial Statement Overview

Summary

Ironwood Pharma demonstrates operational recovery with improved profitability and cash flow generation. However, significant financial risks remain due to high leverage and negative equity, which could impact future growth and financial stability. Continued focus on revenue growth and equity improvement is essential to mitigate existing financial risks.

Income Statement

The income statement shows a recovery in profitability with a TTM net income of $24.98 million compared to a significant loss in the previous year. Gross profit margin is strong at 99.6%, indicating effective cost management. However, revenue has declined from $442.7 million to $378.4 million, reflecting a negative growth trend. The EBIT margin has improved to 28.7% TTM from a negative margin last year, showing operational improvements but highlighting previous volatility.

Balance Sheet

The balance sheet reveals significant leverage issues with a negative stockholders' equity of $311.3 million TTM, resulting in a concerning debt-to-equity ratio. Total liabilities exceed total assets, indicating financial instability. The equity ratio is negative, and the company is reliant on debt financing, posing risks in the event of interest rate increases or market downturns.

Cash Flow

Cash flow analysis shows strong operating cash flow of $124.2 million TTM, which is robust compared to net income, illustrating good cash generation capability. Free cash flow is positive and stable, although lower than previous periods, indicating efficient cash management. The operating cash flow to net income ratio is favorable, suggesting healthy cash conversion from profits.

Breakdown
Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
442.74M	410.60M	413.75M	389.52M	428.41M
	Gross Profit
337.95M	409.18M	412.23M	386.39M	404.54M
	EBIT
-945.43M	250.34M	232.26M	142.94M	120.12M
	EBITDA
-924.86M	261.44M	233.33M	141.90M	101.13M
	Net Income Common Stockholders
-1.00B	175.06M	528.45M	106.18M	-15.31M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
92.15M	656.20M	620.13M	362.56M	177.02M
	Total Assets
471.07M	1.10B	1.13B	559.24M	402.75M
	Total Debt
715.54M	415.92M	475.80M	453.70M	431.22M
	Net Debt
623.38M	-240.29M	-144.33M	91.14M	254.20M
	Total Liabilities
817.37M	448.14M	521.02M	496.60M	496.00M
	Stockholders Equity
-346.30M	652.38M	605.91M	62.64M	-93.25M
Cash Flow		Free Cash Flow
183.15M	273.63M	261.63M	166.99M	3.54M
	Operating Cash Flow
183.43M	273.76M	261.89M	168.84M	10.72M
	Investing Cash Flow
-1.03B	-136.00K	-265.00K	-1.84M	-11.14M
	Financing Cash Flow
277.16M	-237.55M	-4.55M	18.55M	-1.19M

Ironwood Pharma Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.93
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IRWD, the sentiment is Negative. The current price of 0.93 is above the 20-day moving average (MA) of 0.89, below the 50-day MA of 1.26, and below the 200-day MA of 3.46, indicating a neutral trend. The MACD of -0.12 indicates Negative momentum. The RSI at 41.19 is Neutral, neither overbought nor oversold. The STOCH value of 77.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IRWD.

Ironwood Pharma Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DERM	58 Neutral	$162.49M	―	-72.60%	―	-29.11%	-219.44%
CPIX	56 Neutral	$62.86M	―	-24.71%	―	-4.26%	-3.92%
IRWD	53 Neutral	$150.85M	85.83	-8.02%	―	-20.63%	―
Sector *	52 Neutral	$5.35B	3.83	-41.61%	2.85%	17.10%	1.22%
ASRT	48 Neutral	$62.22M	―	-16.66%	―	-17.83%	94.26%
AQST	45 Neutral	$297.96M	―	77.48%	―	13.80%	-389.41%
ESPR	42 Neutral	$215.98M	―	23.44%	―	185.66%	89.22%

Ironwood Pharma Corporate Events

Ironwood Pharma Faces Nasdaq Compliance Deadline

Ironwood Pharmaceuticals announced it received a notification from Nasdaq on March 21, 2025, due to a delay in filing its 2024 Annual Report, which led to non-compliance with Nasdaq’s listing rules. The company has until May 20, 2025, to submit a compliance plan, with a potential extension to September 1, 2025, to file the report. The notice does not immediately affect the company’s Nasdaq listing, and Ironwood plans to file the report promptly to regain compliance.