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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Ironwood Pharmaceuticals, Inc. (XNAS:IRWD) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
IRWD
Name:
IRONWOOD PHARMACEUTICALS, INC. (XNAS:IRWD)
Sector:
-
Industry:
Drug Manufacturers�Specialty & Generic
CEO:
Mr. Mark Mallon
Total Employees:
219
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -9445.18% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF IRONWOOD PHARMACEUTICALS, INC.(IRWD) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND DRUG MANUFACTURERS�SPECIALTY & GENERIC INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
10.88
One Month Price Target:
$10.94
Six Month Price Target :
$11.26
Likely Price in One Year's Time:
Ticker:
$11.64
Likely Trading Range Today Under (Normal Volatility)
$10.84
Price Upper limit ($) :
$10.93
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$10.32
This week:
$9.64
This month :
$8.39
Other Primary facts
Market Cap:
1.67B
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
153.23M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
9.67%
-10.81%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$13.46
$12.29
$8.30
$9.47
Medium risk (<10%) entry points
Buy Call
Sell Call
$11.90
Buy Put:
Sell Put:
$11.65
$9.85
$10.11
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
IRWD
Sharpe Ratio:
0.14%
Comparison:
IRWD, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -85.10% lower than the industry
& is -94.04% lower than the market/S&P 500 average
Average Returns/Yield of
IRWD
Daily returns:
0.01%
Weekly returns:
0.06%
Monthly returns:
0.24%
Yearly returns:
14.20%
Comparison of returns:
Average annual returns/yield (last 3 years) is -79.32% below industry average
Classification:
IRWD, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.98
Statistical test of Returns:
IRWD has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.50%
Weekly Volatility:
5.58%
Monthly Volatility:
11.16%
Yearly Volatility:
38.66%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.86%
Volatility in last five trading days has been -65.62% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.11%
Weekly VaR:
-11.43%
Monthly VaR:
-22.86%
How Much Can the price of
IRWD
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-20%
Worst case (decline):
-79.20%
This translates to price declining to:
$8.70
This translates to price declining to:
$2.26
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
IRWD is a 61.36% riskier investment compared to the market/S&P 500 & is 38.24% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -33.64% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
IRWD
Beta in relation to market/S&P 500--1.03
Expected beta in 1 year's time:
0.704
Expected beta in 3 year's time:
0.996
Unlevered (debt free) Beta:
0.352
Beta in relation to Nasdaq (XNAS):
0.415
Beta in relation to all global stocks::
0.438
Beta Comparison & Analysis
Beta of competitors/peers::
1.102
Beta is -6.13% lower than peers
Average Industry Beta:
1.054
Beta is -1.87% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
167.74%
Sustainable growth rate is 420.19% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.073
Alpha is -290.44% below industry average alpha yield
Alpha is -465% below the market average
Analysis of Cost of Capital of
IRWD
Equity cost of capital:
0.102
Equity cost of capital is -1.30% below industry mean WACC
Unlevered (without debt) cost of capital:
3.48%
Before-tax cost of debt:
4.89%
After-tax cost of debt:
3.87%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.87%
WACC is -7.20% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$2.76
Revenue growth rate per share of (3Y):
3.22
Annual revenue growth rate is -93.83% below industry average
EPS:
$3.19
Expected Annual growth rate of EPS (3Y):
184.09%
Expected future EPS growth rate is 684.53% higher than the Drug Manufacturers�Specialty & Generic industry
Free cash flow (FCF) per share:
$1.15
-
-
Debt per share
$2.70
EBITDA per share
$1.59
Valuation Analysis Today of
IRWD
P/E Ratio:
10.96
P/E Ratio of Competitors/Peers:
178.46
P/E ratio is -93.86% lower than main peers & is -72.57% lower than the industry
Stock price/value with industry average P/E ratio: $127.48
IRWD is -91.47% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
3.95
Price to sales ratio is -44.25% below the industry mean
P/B (Price to book value ratio):
3.22
Price to free cash flow: 9.45
Price to free cash flow ratio is -73.53% lower than the industry
Net income growth rate (3Y):
-276.06%
Net income growth rate is -49.61% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
79.78%
Net debt to equity ratio:
-10.93%
Debt to assets ratio:
38.13%
Net debt to assets ratio:
-5.23%
Debt-to-asset ratio is -26.02% below industry average
Ability to repay debt:
Interest coverage ratio:
9.3
Interest coverage ratio is 33.76% more than industry average
Looking forward:
Debt growth rate:
9.79%
Annual debt growth is 49% higher than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.309
Statistical significance of correlation:
IRWD has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.408
Stock price is -24.31% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.408
Correlation of price movement with Nasdaq (^IXIC):
0.001
Covariance of price movement with the market:
0.001
Kurtosis
1.786
Returns are more concentrated around the mean (platykurtic), compared to a normal distribution
Skewness of returns:
-0.11
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
IRWD
Gross Profit Margin Ratio:
300%
Operating Profit Margin Ratio:
57.93%
Operating profit margin is -272.26% lower than the industry
Net Profit Margin Ratio:
300%
Effective Tax Rate:
-143.27%
Effective tax rate is -1200.36% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
101.84%
Return on equity (ROE) is -1123.83% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
48.67%
Return on assets (ROA) is -1404.49% lower than the industry
Financial Leverage:
1.6x
Current Ratio:
4.82
Current ratio is 46.21% above industry average
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 7.2 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
1.9M
Each employee generates 130% more revenue than industry average revenue per employee
EBITDA generated per employee:
1.1M
Each employee generates 1078% more EBITDA than industry average revenue per employee
Profit generated per employee:
2.4M
Each employee generates 2243% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
0.0K
-
Assets/Capital per employee
1.7M
-
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- -20.05%
Growth rate in R&D investment/expenditure is -405.46% lower than the industry
Competitors/Peer firms of
IRWD
TRANSFORMERS AND RECTIFIERS (INDIA) LIMITED (XNSE:TRIL)
PROTHENA CORPORATION PUBLIC LIMITED COMPANY (XNAS:PRTA)
CASSAVA SCIENCES, INC. (XNAS:SAVA)
ALIGNMENT HEALTHCARE, INC. (XNAS:ALHC)
MYRIAD GENETICS, INC. (XNAS:MYGN)
Outset Medical, Inc. (XNAS:OM)
GLOBAL BLOOD THERAPEUTICS, INC. (XNAS:GBT)
MODIVCARE INC. (XNAS:MODV)
LANTHEUS HOLDINGS, INC. (XNAS:LNTH)
Current Analyst Ratings
Strong buy�13%
Buy�8%
Hold�21%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
422.44M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
-
324.91M
65.74M
-
112.34M
-
-
178.09M
760.00K
26.26M
1.11M
244.14M
244.71M
527.32M
216.76M
- 310559.00K
527.32M
Statement of Cash Flow
Date:
Period:
-
Differed Income Tax :
-
Stock Based Compensation :
-
Change in Working Capital :
- 0.25K
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
-
Net Cash Provided by Operating Activities:
-
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
593.37M
-
593.37M
105.52M
-
11.22M
710.10M
22.26M
-
-
-
335.44M
15.58M
373.28M
-
1.08B
532.00K
123.68M
-
-
23.19M
147.40M
413.08M
5.11M
418.20M
-
565.60M
155.00K
- 832640.00K
-
1.35B
March 31, 2022 at 6:00:00 AM
138.40M
517.78M
1.08B
-
536.76M
- 56609.0K
-
-
-
-
-
-
-
-
-
-
-
-
621.86M
-
-
-
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
IRWD
2023
2024
2025
2026
2027
$11.70
$12.51
$13.38
$14.31
$15.31