Reviewing Regulus Therapeutics (NASDAQ:RGLS) & Ironwood Pharmaceuticals (NASDAQ:IRWD)

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

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Regulus Therapeutics	N/A	N/A	-$30.04 million	($1.46)	-1.03
Ironwood Pharmaceuticals	$400.57 million	1.72	-$1.00 billion	($6.79)	-0.65

Regulus Therapeutics has higher earnings, but lower revenue than Ironwood Pharmaceuticals. Regulus 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.

Insider and Institutional Ownership

92.4% of Regulus Therapeutics shares are owned by institutional investors. 4.4% of Regulus Therapeutics shares are owned by insiders. Comparatively, 12.9% of Ironwood Pharmaceuticals shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Regulus Therapeutics	0	1	5	0	2.83
Ironwood Pharmaceuticals	0	3	4	0	2.57

Regulus Therapeutics currently has a consensus price target of $10.80, suggesting a potential upside of 620.00%. Ironwood Pharmaceuticals has a consensus price target of $12.17, suggesting a potential upside of 177.15%. Given Regulus Therapeutics’ stronger consensus rating and higher probable upside, analysts clearly believe Regulus Therapeutics is more favorable than Ironwood Pharmaceuticals.

Volatility and Risk

Regulus Therapeutics has a beta of 1.62, meaning that its stock price is 62% more volatile than the S&P 500. Comparatively, Ironwood Pharmaceuticals has a beta of 0.48, meaning that its stock price is 52% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Regulus Therapeutics	N/A	-55.47%	-49.37%
Ironwood Pharmaceuticals	2.30%	-6.37%	4.61%

Summary

Regulus Therapeutics beats Ironwood Pharmaceuticals on 7 of the 13 factors compared between the two stocks.

About Regulus Therapeutics

Regulus Therapeutics Inc., a clinical-stage biopharmaceutical company, focuses on discovery and development of drugs that targets microRNAs to treat a range of diseases in the United States. Its product candidates include RGLS8429, an anti-miR next generation oligonucleotide targeting miR-17, which is in Phase 1b clinical trial for the treatment of autosomal dominant polycystic kidney disease. The company is also developing a pipeline of preclinical drug products for target organ-selective delivery strategies. Regulus Therapeutics Inc. was incorporated in 2007 and is headquartered in San Diego, California.

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.