Critical Analysis: Ironwood Pharmaceuticals (NASDAQ:IRWD) & Exicure (NASDAQ:XCUR)

Ironwood Pharmaceuticals (NASDAQ:IRWD) and Exicure (NASDAQ:XCUR) are both small-cap healthcare companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, profitability, analyst recommendations, dividends, valuation, earnings and risk.

Earnings & Valuation

This table compares Ironwood Pharmaceuticals and Exicure”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ironwood Pharmaceuticals	$296.15 million	1.99	$24.02 million	$0.77	4.62
Exicure	$500,000.00	13.49	-$4.95 million	($1.32)	-0.78

Ironwood Pharmaceuticals has higher revenue and earnings than Exicure. Exicure is trading at a lower price-to-earnings ratio than Ironwood Pharmaceuticals, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Ironwood Pharmaceuticals and Exicure’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ironwood Pharmaceuticals	33.36%	-58.38%	34.93%
Exicure	N/A	-237.91%	-61.98%

Volatility and Risk

Ironwood Pharmaceuticals has a beta of 0.21, meaning that its stock price is 79% less volatile than the S&P 500. Comparatively, Exicure has a beta of 3.64, meaning that its stock price is 264% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings for Ironwood Pharmaceuticals and Exicure, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ironwood Pharmaceuticals	0	4	2	1	2.57
Exicure	1	0	0	0	1.00

Ironwood Pharmaceuticals currently has a consensus target price of $6.23, suggesting a potential upside of 75.09%. Given Ironwood Pharmaceuticals’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Ironwood Pharmaceuticals is more favorable than Exicure.

Institutional and Insider Ownership

42.8% of Exicure shares are held by institutional investors. 9.3% of Ironwood Pharmaceuticals shares are held by company insiders. Comparatively, 52.8% of Exicure shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Ironwood Pharmaceuticals beats Exicure on 10 of the 14 factors compared between the two stocks.

About Ironwood Pharmaceuticals

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, Saudi Arabia, 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; Apraglutide, a next-generation, long-acting synthetic peptide analog of glucagon-like peptide-2, as a differentiated therapeutic for rare diseases, including short bowel syndrome dependent on parenteral support and acute graft versus host disease; 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.

About Exicure

Exicure, Inc., an early-stage biotechnology company, develops nucleic acid therapies targeting ribonucleic acid against validated targets. The company's preclinical candidate includes SCN9A that is in preclinical studies for the treatment of chronic pain. It also develops immuno-oncology therapeutics based on its proprietary SNA technology. Exicure, Inc. was founded in 2011 and is headquartered in Chicago, Illinois.