Ironwood Pharmaceuticals Inc

IRWD

Pharmaceutical Preparations

Mkt Cap

$927.3M

PE

-0.86

Debt

$608.1M

Cash

$121.5M

EV

$1.414B

FCF

$147.9M

Market Cap

$927.3M

P/E Ratio

-0.86

Debt

$608.1M

Cash

$121.5M

EV

$1.414B

FCF

$147.9M

Charts data: {"Earnings":[{"time":"2014-12-30","value":-189618000},{"time":"2015-12-30","value":-142669000},{"time":"2016-12-30","value":-81708000},{"time":"2017-12-30","value":-116937000},{"time":"2018-12-30","value":-282368000},{"time":"2019-12-30","value":21505000},{"time":"2020-12-30","value":106176000},{"time":"2021-12-30","value":528448000},{"time":"2022-12-30","value":175065000},{"time":"2023-12-30","value":-1031559000}],"Sales":[{"time":"2014-12-30","value":76436000},{"time":"2015-12-30","value":149555000},{"time":"2016-12-30","value":273957000},{"time":"2017-12-30","value":298276000},{"time":"2018-12-30","value":346639000},{"time":"2019-12-30","value":428413000},{"time":"2020-12-30","value":389523000},{"time":"2021-12-30","value":413753000},{"time":"2022-12-30","value":410596000},{"time":"2023-12-30","value":442735000}],"Net Margins":[{"time":"2014-12-30","value":-2.4807420587157885},{"time":"2015-12-30","value":-0.9539567383236937},{"time":"2016-12-30","value":-0.29825118540500883},{"time":"2017-12-30","value":-0.39204294009575025},{"time":"2018-12-30","value":-0.8145880873185072},{"time":"2019-12-30","value":0.0501968894501334},{"time":"2020-12-30","value":0.2725795395907302},{"time":"2021-12-30","value":1.277206449258374},{"time":"2022-12-30","value":0.4263680113785814},{"time":"2023-12-30","value":-2.3299693947846905}],"Assets":[{"time":"2014-12-30","value":333513000},{"time":"2015-12-30","value":619121000},{"time":"2016-12-30","value":709821000},{"time":"2017-12-30","value":605674000},{"time":"2018-12-30","value":332050000},{"time":"2019-12-30","value":402748000},{"time":"2020-12-30","value":559238000},{"time":"2021-12-30","value":1126927000},{"time":"2022-12-30","value":1100519000},{"time":"2023-12-30","value":471073000}],"Stockholders Equity":[{"time":"2014-12-30","value":88552000},{"time":"2015-12-30","value":95125000},{"time":"2016-12-30","value":66716000},{"time":"2017-12-30","value":9848000},{"time":"2018-12-30","value":-196371000},{"time":"2019-12-30","value":-93251000},{"time":"2020-12-30","value":62640000},{"time":"2021-12-30","value":605911000},{"time":"2022-12-30","value":652378000},{"time":"2023-12-30","value":-346295000}],"ROE":[{"time":"2014-12-30","value":-2.141318095582257},{"time":"2015-12-30","value":-1.4998055190538764},{"time":"2016-12-30","value":-1.2247137118532285},{"time":"2017-12-30","value":-11.874187652315191},{"time":"2018-12-30","value":1.4379312627628316},{"time":"2019-12-30","value":-0.23061414890993126},{"time":"2020-12-30","value":1.6950191570881226},{"time":"2021-12-30","value":0.8721544913361864},{"time":"2022-12-30","value":0.26834902464522103},{"time":"2023-12-30","value":2.978844626691116}],"ROA":[{"time":"2014-12-30","value":-0.5078362762471028},{"time":"2015-12-30","value":-0.16489183859051784},{"time":"2016-12-30","value":-0.07307476110174255},{"time":"2017-12-30","value":-0.1277667524113632},{"time":"2018-12-30","value":-0.5846890528534859},{"time":"2019-12-30","value":0.2982584643499161},{"time":"2020-12-30","value":0.25559779557183165},{"time":"2021-12-30","value":0.2060994190395651},{"time":"2022-12-30","value":0.22936632625152314},{"time":"2023-12-30","value":-2.0069713186703546}]}

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, 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; 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.

Sector

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12/31/18
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9/30/18
10-Q
6/30/18
10-Q
3/31/18
10-K
12/31/17

DCF

Discounted Cash Flow Valuation of Ironwood Pharmaceuticals Inc

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$147.9M	$192.3M	$244.6M	$304.4M	$370.4M	$440.4M	$511.3M	$579.5M	$640.6M	$690.5M	$725M	$7.25B
DCF		$167.2M	$185M	$200.2M	$211.8M	$218.9M	$221M	$217.8M	$209.4M	$196.3M	$179.2M	$1.792B
Value	$3.799B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 63%

Earnings Stability -48%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been decreasing indicating a lower marginal ROA with respect to the calculated one, this could impede growth.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Net Margin	-95%	-30%	-39%	-81%	5%	27%	130%	43%	-230%	-260%
ROA	-16%	-7.3%	-13%	-58%	30%	26%	21%	23%	-200%	-230%
ROE	-150%	-120%	-1.2K%	140%	-23%	170%	87%	27%	300%	330%

What is the average Net Margin?

The average Net Margin over the past 5 years is -18.64%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is -15.55%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is -26.71%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is -21.05%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +117.03%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is +23.94%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

The company has high debt with respect to the cashflow it generates.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Debt FCF	-3.25	-	-2.40	-3.94	115.38	3.27	2.51	1.51	3.26	4.11
Debt Equity	3.79	-	25.30	-1.59	-4.38	8.72	1.08	0.63	-1.73	-1.84
MIN
Graham Stability	-	-	-	-	-	-	-	80%	-380%	-380%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 4.11.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is -8.75.

What is the Graham’s Stability?

Graham’s Stability measure stands at -3.82.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has not been increasing in the past years.

Years	12-2016	12-2018	12-2020	12-2022	Trend
Revenue	7.1%	5%	4.4%	7.8%	-11%
Net Income	-	-	-	-	-230%
Stockholders Equity	-	-	-	-	67%
FCF	-	-	3.1%	-33%	-1.4K%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +5.02%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is -10.56%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is +29.58%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is -230.3%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +12.01%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is +67.06%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is -.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is -1.4K%.