Ironwood Pharmaceuticals (IRWD) valuation at a glance
- Price
- $3.65
- Forward P/E
- 2.5×
- Market cap
- $576M
- P/S (TTM)
- 1.7×
CompaniesIRWD
IRWD
Ironwood Pharmaceuticals
HealthcarePharmaMispriced Patent Cliff
Overview
$3.65+2.8%
Market Cap
$576M
SEC filings
P/E (TTM)
5.9×
SEC filings
Rev Growth YoY
158.9%
+158.9%SEC filings
Gross Margin
75.2%
SEC filings
FCF Yield
8.5%
Calculated from SEC filings
Fair Value
Not established
internal
Conviction
3/5Single-drug pharma priced for a 2026 patent cliff, but every ANDA settlement locks generics out to March 2029, at just 3.1× guided EBITDA.
Research Depth
ScreeningDeep ResearchFull Model
Updated 24d ago
Quality Snowflake
Overall 73/100
Value4/4
Future3/3
Past4/4
Health2/3
Dividend0/1
Each axis scores the checks for which data is available (filled = pass, hollow = no data). Computed from the sourced metrics on this page, not a third-party rating.
Thesis
CORRECTED 2 September 2026. The operating margin published here, 68.1%, was the March 2026 quarter alone, being $72.573M on $106.506M, while the revenue and net margin beside it are trailing twelve month figures. On the same trailing window the operating margin is 55.4%, being $200.2M on $361.5M. Mixing a single quarter with a trailing year flatters the operating line whenever the latest quarter is strong. It is corrected below. ORIGINAL TEXT FOLLOWS. Ironwood markets LINZESS (linaclotide) for IBS-C/CIC. The market discounts a 2026 patent cliff, but every settled ANDA agreement locks generics out until March 31, 2029. Teva's license starts then, with Sandoz/Aurobindo following 2030. Q1 2026 revenue was $106.5M (+159% YoY) with $40.8M net income, and FY2026 adj EBITDA is guided >$300M, putting the stock at ~3.1× guided EBITDA. At 2.5× forward earnings, any beat could mechanically re-rate the stock 30–50%. Phase 1.
Bull Case
Mispricing~3.1× guided EBITDA and 2.5× forward P/E; generics locked out to March 2029 = ~2.5 years of near-monopoly cash flows the market is ignoring.
MomentumQ1 2026 revenue $106.5M (+159% YoY), $40.8M net income; FY2026 LINZESS net sales guided $1.125–1.175B.
PipelineApraglutide (short bowel syndrome) Phase 3 STARS-2 starting Q2 2026, could eventually replace LINZESS.
Bear Case
Melting Ice CubeSingle-drug dependency; after 2029 generic entry, LINZESS revenue faces a structural step-down.
Balance SheetNegative book equity; $200M convertible notes mature June 2026, an imminent cash obligation. 12.6% short interest.
IRA CliffCMS-negotiated LINZESS price (~$136/mo vs ~$568 list) takes effect Jan 1, 2027, pressuring Medicare volume economics.
Key Metrics
Market Cap
$576M
SEC filings
Enterprise Value
$953M
Calculated from SEC filings
Revenue (TTM)
$362M
SEC filings
P/E (TTM)
5.9×
SEC filings
Forward P/E
2.5×
internal
P/S (TTM)
1.7×
SEC filings
P/B
–
SEC filings
EV/EBITDA
3.1×
Calculated from SEC filings
PEG
–
Calculated from SEC filings
Revenue Growth
158.9%
SEC filings
Gross Margin
75.2%
SEC filings
Operating Margin
55.4%
SEC filings
Net Margin
28.3%
SEC filings
Free Cash Flow
$51M
SEC filings
FCF Yield
8.5%
Calculated from SEC filings
Debt / Equity
–
SEC filings
Current Ratio
1.4×
SEC filings
Short Interest
12.6%
SEC filings
Institutional Own.
98.3%
SEC filings
Insider Own.
2.9%
SEC filings
Shares Out.
158.0M
SEC filings
Float
150.0M
SEC filings
Valuation
Price vs Fair Value
Bear$2.50
Base$5.50
Bull$8.00
Now $3.65
Bear Case
$2.50
Apraglutide fails; converts strain balance sheet; cliff prices in
Base Case
$5.50
Generics locked to 2029; >$300M EBITDA holds; modest re-rate from 2.5× fwd P/E
Bull Case
$8.00
Apraglutide advances + debt paydown executes; multiple normalizes
Cash-Flow Snapshot
FCF (TTM)
$51M
FCF Yield
8.9%
Balance Sheet
$377M net debt
Rev CAGR
-10%
Free cash flow and balance sheet from SEC filings. A full multi-scenario DCF is built at the deep-research stage; the fair-value range above is the working estimate until then.
Historical Multiples
| Year | P/E | P/S | EV/EBITDA |
|---|---|---|---|
| FY22 | 10.9× | 4.6× | 6.4× |
| FY23 | – | 4.0× | – |
| FY24 | – | 2.0× | 12.2× |
| FY25 | 22.9× | 1.9× | 8.9× |
| TTM · | 5.9× | 1.7× | 4.8× |
Current multiple highlighted vs trailing history.
Peer Comparison
| Ticker | Mkt Cap | P/E | P/S | EV/EBITDA | Rev Growth | Gross Mgn | Net Mgn |
|---|---|---|---|---|---|---|---|
| IRWD | $607M | 5.9× | 1.7× | 4.8× | +159.0% | 75.0% | 28.0% |
| SUPN | $2.55B | – | 3.3× | 18.0× | +39.0% | 74.0% | -4.0% |
| CORT | $8.92B | 237.5× | 11.6× | – | +5.0% | 98.0% | 6.0% |
| AMPH | $869M | 11.9× | 1.2× | 6.4× | 0.0% | 47.0% | 11.0% |
| ANIP | $1.87B | 21.0× | 2.0× | 10.4× | +20.0% | 61.0% | 10.0% |
| PCRX | $895M | 174.9× | 1.2× | 9.1× | +5.0% | 79.0% | 1.0% |
Financials
| Line Item | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Total Revenue | – | 410.6 | 442.7 | 351.4 | 296.2 |
| Cost of Revenue | 0.0 | 0.0 | – | – | – |
| Gross Profit | 413.8 | 410.6 | – | – | – |
| Operating Income | – | 250.3 | 168.3 | 95.7 | 118.8 |
| EBITDA | – | 261.4 | (924.9) | 100.2 | 104.7 |
| Net Income | – | 175.1 | (1,002) | 0.9 | 24.0 |
| Diluted EPS | – | 0.96 | -6.45 | 0.01 | 0.15 |
| Line Item | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|
| Cash & Equivalents | 656.2 | 92.2 | 88.6 | 215.5 |
| Total Assets | 1,101 | 471.1 | 350.9 | 396.9 |
| Total Debt | 415.9 | 715.5 | 599.5 | 597.8 |
| Total Liabilities | 448.1 | 817.4 | 652.2 | 658.7 |
| Shareholders' Equity | 652.4 | (346.3) | (301.3) | (261.8) |
| Shares Out. (M) | 154.0 | 156.4 | 160.2 | 163.1 |
| Line Item | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|
| Operating Cash Flow | 273.8 | 183.4 | 103.5 | 127.0 |
| Capital Expenditure | (0.1) | (0.3) | (0.1) | (0.0) |
| Free Cash Flow | 273.6 | 183.2 | 103.4 | 127.0 |
| Investing Cash Flow | (0.1) | (1,026) | (0.1) | (0.0) |
| Financing Cash Flow | (237.6) | 277.2 | (107.0) | 0.2 |
Figures normalized from Ironwood Pharmaceuticals, Inc.'s SEC 10-K filed 2026-02-26. USD millions; EPS and share count per their units. Annual periods. Source: 10-K filed 2026-02-26 ↗
Catalysts
Early Nov 2026
Earnings
Q3 2026 10-Q
Estimated from the Q2 filing cadence; the read is revolver paydown from the $185M trailing cash flow and whether Linzess collaboration revenue holds above a $350M annual pace. Source: internal research file
Jun '26
Balance Sheethigh relevance
$200M convertible-note repayment
Removes the most acute near-term liquidity overhang; cash repayment confirms balance-sheet management.
Aug–Nov '26
Earningshigh relevance
Q2/Q3 2026, EBITDA toward >$300M run-rate
At 2.5× forward P/E, an earnings beat could mechanically re-rate the stock 30–50%.
H2 '26
Pipeline
Apraglutide NDA submission / FDA filing acceptance
Shifts apraglutide to 'under active FDA review'; potential trigger for institutional re-entry.
Risks
| Risk | Category | Severity | Probability | Impact on Thesis |
|---|---|---|---|---|
| $385M revolver against $79M of cash | Leverage | Medium | High | The June 2026 convert maturity was solved with bank debt rather than cash; the facility is floating rate and sits on negative equity, so the balance sheet is not deleveraged, only re-termed. |
| Single-partner revenue concentration | Concentration | High | High | Substantially all revenue is the AbbVie collaboration; a gross-to-net reset like 2025 recurring would repeat the 2025 revenue air pocket. |
| $200M converts due June 2026 | Market/Macro | High | High | Imminent cash obligation against a negative-equity balance sheet. |
| Single-drug dependency / 2029 cliff | Execution | High | High | Generic entry March 2029; revenue step-down unless apraglutide succeeds. |
| IRA price cut from Jan 2027 | Regulatory | Medium | High | CMS-negotiated ~$136/mo vs ~$568 list pressures Medicare volume economics. |
| 12.6% short interest | Market/Macro | Low | Medium | Amplifies drawdowns on any negative print. |
Technical Snapshot
52-Week Range
$0.62$3.65$5.78
RSI (14)
55
neutral
50-Day MA
$3.40
+7.4%above
200-Day MA
$2.20
+65.9%above
Avg Vol (30d)
5M
0%vs average
Support Levels
$3.00$2.20$0.62
Resistance Levels
$4.50$5.78
Technical inputs: SEC filings. See the record-specific source notes for measurement basis.
Ownership & Insider Activity
Institutional Holders
| Institution | Shares | % Held | Chg QoQ | Reported |
|---|---|---|---|---|
| Armistice Capital, LLC | 15.0M | 9.13% | -6.2% | 2026-03-31 |
| Blackrock Inc. | 13.4M | 8.12% | +4.5% | 2026-03-31 |
| Sarissa Capital Management, LP | 9.2M | 5.58% | -42.3% | 2026-03-31 |
| Bank of America Corporation | 8.7M | 5.27% | -24.6% | 2026-03-31 |
| Renaissance Technologies, LLC | 8.1M | 4.90% | -1.8% | 2026-03-31 |
| AQR Capital Management, LLC | 7.5M | 4.58% | +59.5% | 2026-03-31 |
| State Street Corporation | 7.5M | 4.53% | +69% | 2026-03-31 |
Insider Activity
Institutions ~98%; insiders ~2.9%. Short interest ~12.6%.
| Name | Title | Action | Shares | Price | Date | Value |
|---|---|---|---|---|---|---|
| Denner Alexander J | Director | Sell | 6.7M | $3.31 | 2026-03-17 | $20.5M |
| Silver Ronald | Officer | Sell | 24K | $3.81 | 2026-02-24 | $90K |
| Minardo John | Officer | Sell | 36K | $3.81 | 2026-02-24 | $136K |
| Martini Gregory S. | Chief Financial Officer | Sell | 22K | $3.81 | 2026-02-24 | $82K |
| Gaskins Tammi L | Officer | Sell | 22K | $3.81 | 2026-02-24 | $80K |
| Mccourt Thomas A | Chief Executive Officer | Sell | 198K | $3.81 | 2026-02-24 | $740K |
Additional issuer disclosures: SEC EDGAR company filings. Availability and filing forms vary by issuer.
Peer Comparison
| Ticker | Mkt Cap | P/E | P/S | EV/EBITDA | Rev Growth | Gross Mgn | Net Mgn |
|---|---|---|---|---|---|---|---|
| IRWD | $607M | 5.9× | 1.7× | 4.8× | +159.0% | 75.0% | 28.0% |
| SUPN | $2.55B | – | 3.3× | 18.0× | +39.0% | 74.0% | -4.0% |
| CORT | $8.92B | 237.5× | 11.6× | – | +5.0% | 98.0% | 6.0% |
| AMPH | $869M | 11.9× | 1.2× | 6.4× | 0.0% | 47.0% | 11.0% |
| ANIP | $1.87B | 21.0× | 2.0× | 10.4× | +20.0% | 61.0% | 10.0% |
| PCRX | $895M | 174.9× | 1.2× | 9.1× | +5.0% | 79.0% | 1.0% |
Recognizable sector comparables. Source basis: SEC filings; lowest multiple in each column highlighted. Loss-making peers show no P/E.
Research Notes
2026-09-17SEC 10-Q
Converts repaid, replaced by a $385M revolver; revenue rebounds 33% off the 2025 reset
The Q2 2026 10-Q (filed 2026-08-06) shows the 2026 convertible notes ($199.7M current at year end) repaid, which retires the June 2026 maturity risk on this page, and a $385.0M revolving credit facility drawn against $79.1M of cash, with equity of negative $161.8M. Trailing revenue was $389.3M, up 32.6% year over year as Q2 rebounded from the 2025 gross-to-net reset, with trailing operating income of $234.2M, operating cash flow of $185.6M and net income of $129.9M; diluted shares fell 5.5% to 167.2M. Substantially all revenue is AbbVie collaboration revenue, a structural single-partner concentration. Nasdaq bid-price compliance was regained on 2025-08-29. Sources: https://www.sec.gov/Archives/edgar/data/1446847/000110465926091987/irwd-20260630x10q.htm, internal research file
2026-09-17Research
Two officer and director sales, no purchases
Nine Form 4s and one Form 3 since 2026-06-17 include a sale of 127,890 shares at $4.52 by the principal financial officer on 2026-07-09 (after a Form 144 on 07-07) and 21,571 shares at $3.73 by a director on 2026-06-17; no open-market purchases or 13D filings were found. Sources: internal research file
2026-06-03Internal
Patent-cliff mispricing
Generic lock-out is March 2029 via settled ANDA agreements, not 2026. At ~3.1× guided EBITDA the cliff looks over-discounted; the $200M June 2026 convert and negative book equity are the offsetting risks.
Sources
Ironwood Pharmaceuticals valuation questions
What is Ironwood Pharmaceuticals's forward P/E ratio?
Ironwood Pharmaceuticals (IRWD) trades at a forward P/E of 2.5×, and 1.7× trailing sales.
What is Ironwood Pharmaceuticals's market cap?
Ironwood Pharmaceuticals (IRWD) has a market capitalization (its market value, often searched as "net worth") of $576M, and an enterprise value of $953M.
What is the bull and bear case for IRWD?
Valuation scenarios: bull $8.00, base $5.50, bear $2.50. Each reflects a distinct set of assumptions; the drivers and sources are detailed in the Valuation section above.