Ironwood Pharmaceuticals Inc (IRWD) stock analysis
Close on Nov 11, 2026Market cap $804.72MP/E 5.4Yield –
StockData Score
Prices as of Nov 12, 2026How the score works
Mixed13 of 30 checks passed
Ironwood Pharmaceuticals passes 13 of the 30 checks behind our score; 12 could not be run for lack of data and count as not passed. Each dot in the shape is one check — hover it for the numbers.
- Valuation
- 6/6
- Growth
- 3/6
- Past performance
- 2/6
- Financial health
- 2/6
- Dividend
- 0/6
What stands out
Margin of safety over 20%
The price is 68.5% below fair value, more than the 20% cushion we look for.
Trading below fair value
The share price of $4.87 is below our fair value estimate of $15.45.
Earnings growth accelerating
Net income grew 424% over the last twelve months, against a 5-year average of -25.7% a year.
Interest well covered
Operating income covers interest expense 8.3 times.
What to watch
Earnings shrank over 5 years
Net income shrank 25.7% a year on average over the last five fiscal years.
Revenue growing under 10% a year
Revenue grew -10.3% a year over the last three fiscal years, short of the 10% we look for.
EPS growing under 10% a year
Diluted EPS grew -46.1% a year over the last three fiscal years.
Elevated bankruptcy risk
The Altman Z-score is -1.06; above 3 is the safe zone and below 1.8 the distress zone.
Valuation6/6
P/E below its 5-year median
Ironwood Pharmaceuticals's P/E of 5.4 is below its own 5-year median of 10.9.
P/E below the industry
Ironwood Pharmaceuticals's P/E of 5.4 is below the Drugs median of 25.0.
EV/EBITDA below its 5-year median
Ironwood Pharmaceuticals's EV/EBITDA of 2.9 is below its 5-year median of 4.3.
P/S below the industry
Ironwood Pharmaceuticals's price-to-sales of 2.01 is below the Drugs median of 4.80 (book value is negative, so we use sales).
Trading below fair value
The share price of $4.87 is below our fair value estimate of $15.45.
Margin of safety over 20%
The price is 68.5% below fair value, more than the 20% cushion we look for.
Growth3/6
Revenue growing under 10% a year
Revenue grew -10.3% a year over the last three fiscal years, short of the 10% we look for.
EPS growing under 10% a year
Diluted EPS grew -46.1% a year over the last three fiscal years.
Earnings growth accelerating
Net income grew 424% over the last twelve months, against a 5-year average of -25.7% a year.
Growing faster than the industry
Revenue grew 18.1% over the last twelve months; the Drugs median is 7.6%.
Guidance raised
Ironwood Pharmaceuticals raised its full-year 2026 Total Revenue outlook on Nov 5, 2026.
Gross margin trend
This company does not report gross profit.
Past performance2/6
Return on equity
Needs positive equity and five years of results.
Return on invested capital
Needs operating income and invested capital.
Return on equity against the industry
Needs positive equity.
Earnings shrank over 5 years
Net income shrank 25.7% a year on average over the last five fiscal years.
Net margin above its 5-year average
Net margin was 37.4% over the last twelve months, against a 5-year average of -9.5%.
Net margin above the industry
Ironwood Pharmaceuticals's net margin of 37.4% is above the Drugs median of -53.5%.
Financial health2/6
Debt level
Needs debt and equity figures.
Debt trend
Needs a balance sheet from five years ago with positive equity.
Debt coverage
Needs operating cash flow.
Interest well covered
Operating income covers interest expense 8.3 times.
Short-term assets cover short-term debts
Current assets are 6.51 times current liabilities.
Elevated bankruptcy risk
The Altman Z-score is -1.06; above 3 is the safe zone and below 1.8 the distress zone.
Dividend0/6
No dividend
Ironwood Pharmaceuticals has not paid a dividend in the last twelve months.
Yield against Treasuries
No dividend.
Yield against the market
No dividend.
Dividend stability
No dividend.
Earnings cover
No dividend.
Cash-flow cover
No dividend.
Fair value
How we estimate itOur estimate per share
$15.45
The share price is 68% below this estimate.
| Method | Multiple used | Own 5Y median | Industry median | Value per share | Weight |
|---|---|---|---|---|---|
| P/E | 17.9× | 10.9× | 25.0× | $16.11 | 44% |
| EV/EBITDA | 10.6× | 4.3× | 17.0× | $16.71 | 39% |
| Earnings power | 7.8% cost of equity | – | – | $10.73 | 17% |
| Fair value | $15.45 | 100% | |||
Valuation over time
Using the earnings and balance sheet published at each date, not today's.
- P/E at month end
- Own 5-year median 10.9
- Drugs median 25.0
An estimate from reported numbers and market multiples, not a price target or investment advice. It can be far off for companies whose profits are about to change sharply.
Market risk
From the past year of daily prices.
Liquidity
Medium risk
- Average value traded per day
- $8.68M
- Value traded per 1% price move
- $2.74M
Downside
High risk
- Typical loss in a bad month
- 30.1%
- Volatility (annualized)
- 81%
- Sharpe ratio, 1 year
- 1.09
- Beta to the S&P 500 (5Y)
- 0.56
Typical bad-month loss, week by week
Margins
Share of revenue, fiscal years 2011 to 2025
Gross margin
Operating margin
Net margin
Growth rates
Compound annual growth to fiscal 2025
| Per year | 1 year | 3 years | 5 years | 10 years | Five-year pace |
|---|---|---|---|---|---|
| Revenue | -15.7% | -10.3% | -5.3% | +7.1% | |
| Operating income | +5.8% | -26.7% | -7.2% | – | |
| Net income | +2629.2% | -48.4% | -25.7% | – | |
| EPS, diluted | +1400.0% | -46.1% | -25.6% | – | |
| Free cash flow | +22.8% | -22.6% | -5.3% | – |
Returns and balance sheet
10 fiscal years. Hover a measure to see how it is calculated.
| Measure | FY2016 | FY2020 | FY2025 | Trend |
|---|---|---|---|---|
| Return on equity | -101.0% | -693.7% | -8.5% | |
| Return on assets | -12.3% | 22.1% | 6.4% | |
| Current ratio | 4.17 | 15.41 | 1.13 | |
| Debt to equity | 1.98 | – | – | |
| Net debt to EBITDA | -1.68× | – | – | |
| Interest coverage | -1.3× | 4.8× | 3.0× | |
| Capex to revenue | 1.5% | 0.5% | 0.0% | |
| Diluted shares | 145M | 161M | 163M |
Where the cash went
Fiscal 2021 to 2025, five years combined
Ironwood Pharmaceuticals generated $949.68M from operations and spent $151.38M on capital expenditure, dividends and share buybacks. 1% of that went back into the business.
DuPont analysis
Return on equity split into margin, efficiency and leverage
| Fiscal year | Net margin | Asset turnover | Equity multiplier | Return on equity |
|---|---|---|---|---|
| FY2025 | 8.1% | 0.79× | -1.33× | -8.5% |
| FY2024 | 0.3% | 0.86× | -1.27× | -0.3% |
| FY2023 | -226.4% | 0.56× | 5.13× | -654.9% |
| FY2022 | 42.6% | 0.37× | 1.77× | 27.8% |
| FY2021 | 127.7% | 0.49× | 2.52× | 158.1% |
| FY2020 | 27.3% | 0.81× | -31.43× | -693.7% |
| FY2019 | 5.0% | 1.17× | -2.54× | -14.9% |
| FY2018 | -81.5% | 0.74× | -5.03× | 302.8% |
| FY2017 | -39.2% | 0.45× | 17.18× | -305.5% |
| FY2016 | -29.8% | 0.41× | 8.21× | -101.0% |
Piotroski F-Score
Nine tests of profitability, balance sheet and efficiency, fiscal 2025 against fiscal 2024
- ProfitableNet income above zero$24.02M
- Cash generatingOperating cash flow above zero$127.04M
- Return on assets improvedROA up on the prior year0.2% → 6.8%
- Earnings backed by cashOperating cash flow above net income$127.04M vs $24.02M
- Less leverageLong-term debt to assets fell– → –
- Better liquidityCurrent ratio rose4.69 → 1.13
- No dilutionShare count did not rise160M → 163M
- Gross margin improvedGross margin up on the prior year– → –
- More efficientAsset turnover rose0.75 → 0.84
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