Head to Head Comparison: Nektar Therapeutics (NKTR) and Ironwood Pharmaceuticals (IRWD)

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

Analyst Recommendations

This is a breakdown of recent ratings for Nektar Therapeutics and Ironwood Pharmaceuticals, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nektar Therapeutics 0 1 12 0 2.92
Ironwood Pharmaceuticals 1 6 4 0 2.27

Nektar Therapeutics presently has a consensus price target of $48.18, suggesting a potential downside of 39.03%. Ironwood Pharmaceuticals has a consensus price target of $17.56, suggesting a potential upside of 7.84%. Given Ironwood Pharmaceuticals’ higher probable upside, analysts plainly believe Ironwood Pharmaceuticals is more favorable than Nektar Therapeutics.

Profitability

This table compares Nektar Therapeutics and Ironwood Pharmaceuticals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nektar Therapeutics -42.08% -190.68% -19.50%
Ironwood Pharmaceuticals -48.89% -645.22% -19.69%

Institutional and Insider Ownership

96.0% of Nektar Therapeutics shares are held by institutional investors. 6.1% of Nektar Therapeutics shares are held by company insiders. Comparatively, 7.6% of Ironwood Pharmaceuticals shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Nektar Therapeutics and Ironwood Pharmaceuticals’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Nektar Therapeutics $165.44 million 75.22 -$153.52 million ($0.71) -111.31
Ironwood Pharmaceuticals $273.96 million 8.90 -$81.70 million ($0.97) -16.78

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

Volatility & Risk

Nektar Therapeutics has a beta of 1.81, indicating that its stock price is 81% more volatile than the S&P 500. Comparatively, Ironwood Pharmaceuticals has a beta of 1.45, indicating that its stock price is 45% more volatile than the S&P 500.

Summary

Nektar Therapeutics beats Ironwood Pharmaceuticals on 9 of the 14 factors compared between the two stocks.

About Nektar Therapeutics

Nektar Therapeutics is a biopharmaceutical company that discovers and develops medicines in areas of high unmet medical need. The Company’s research and development pipeline of new investigational drugs includes treatments for cancer, auto-immune disease and chronic pain. It leverages its chemistry platform to discover and design new drug candidates. These drug candidates utilize its polymer conjugate technology platforms, which are designed to enable the development of new molecular entities that target known mechanisms of action. Its programs include Immuno-oncology (I-O), Immunology, Pain-NKTR-181 and Oncology-ONZEALD. It is developing medicines designed to directly or indirectly modulate the activity of key immune cells, such as cytotoxic T cells and Natural Killer (NK) cells, to increase their numbers and improve their function to recognize and attack cancer cells.

About Ironwood Pharmaceuticals

Ironwood Pharmaceuticals, Inc. is a biotechnology company. The Company is advancing product opportunities in areas of unmet need, including irritable bowel syndrome with constipation (IBS C), and chronic idiopathic constipation (CIC), hyperuricemia associated with uncontrolled gout, uncontrolled gastroesophageal reflux disease (uncontrolled GERD), and vascular and fibrotic diseases. It operates in human therapeutics business segment. Its product, linaclotide, is available to adult men and women suffering from IBS C or CIC in the United States under the trademarked name LINZESS, and is available to adult men and women suffering from IBS C in certain European countries under the trademarked name CONSTELLA. It is also advancing IW-3718, a gastric retentive formulation of a bile acid sequestrant with the potential to provide symptomatic relief in patients with uncontrolled GERD. Its vascular/fibrotic programs include IW-1973 and IW-1701, which targets soluble guanylate cyclase (sGC).

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