IRWD
Ironwood Pharmaceuticals, Inc.
$3.59
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 66.8% below fair value
You pay
$3.59
Bear
$9.26
Fair
$10.80
Bull
$12.35
Bear
$9.26
+157.9%
$0.77 × 12x P/E
Fair
$10.80
+200.9%
$0.77 × 14x P/E
Bull
$12.35
+243.9%
$0.77 × 16x P/E
Adjust Assumptions
14.0x
0.77$
Key Value Driver
Normalized P/E multiple (14x base case)
Implied Market Multiple
4.7x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (30 analysts)
$6.68
Divergence from AlphaVal
62%
Summary
Applying a 14x P/E to adjusted EPS of $0.77, the base-case value is $10.80 per share.
Warnings
The company's reported profits differ from official accounting profits by 414%. Check what costs are being left out of the adjusted number.
Wall Street's average price target is $6.68 (from 30 analysts). Our estimate is 62% above the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples