Contrasting Nuvalent (NASDAQ:NUVL) and Ironwood Pharmaceuticals (NASDAQ:IRWD)

Nuvalent (NASDAQ:NUVL) and Ironwood Pharmaceuticals (NASDAQ:IRWD) are both medical companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, profitability, risk, earnings and dividends.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Nuvalent	N/A	-28.63%	-27.15%
Ironwood Pharmaceuticals	-0.65%	-0.96%	0.74%

Institutional & Insider Ownership

97.3% of Nuvalent shares are held by institutional investors. 12.5% of Nuvalent shares are held by insiders. Comparatively, 12.9% of Ironwood Pharmaceuticals shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Nuvalent has a beta of 1.33, indicating that its share price is 33% more volatile than the S&P 500. Comparatively, Ironwood Pharmaceuticals has a beta of 0.47, indicating that its share price is 53% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Nuvalent and Ironwood Pharmaceuticals, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nuvalent	1	1	10	1	2.85
Ironwood Pharmaceuticals	0	3	3	0	2.50

Nuvalent currently has a consensus price target of $112.60, suggesting a potential upside of 16.47%. Ironwood Pharmaceuticals has a consensus price target of $10.40, suggesting a potential upside of 195.45%. Given Ironwood Pharmaceuticals’ higher possible upside, analysts clearly believe Ironwood Pharmaceuticals is more favorable than Nuvalent.

Valuation and Earnings

This table compares Nuvalent and Ironwood Pharmaceuticals”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nuvalent	N/A	N/A	-$126.22 million	($3.47)	-27.86
Ironwood Pharmaceuticals	$442.73 million	1.27	-$1.00 billion	($0.03)	-117.33

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

Summary

Nuvalent beats Ironwood Pharmaceuticals on 8 of the 14 factors compared between the two stocks.

About Nuvalent

Nuvalent, Inc., a clinical stage biopharmaceutical company, engages in the development of therapies for patients with cancer. Its lead product candidates are NVL-520, a novel ROS1-selective inhibitor to address the clinical challenges of emergent treatment resistance, central nervous system (CNS)-related adverse events, and brain metastases that may limit the use of ROS1 tyrosine kinase inhibitors (TKIs) for patients with ROS proto-oncogene 1 (ROS1)-positive non-small cell lung cancer (NSCLC) which is under the phase 2 portion of the ARROS-1 Phase 1/2 clinical trial; NVL-655, a brain-penetrant ALK-selective inhibitor, to address the clinical challenges of emergent treatment resistance, CNS-related adverse events, and brain metastases that might limit the use of first-, second-, and third-generation ALK inhibitors that is under the phase 2 portion of the ALKOVE-1 Phase 1/2 clinical trial; and NVL-330, a brain-penetrant human epidermal growth factor receptor 2 (HER2)-selective inhibitor designed to treat tumors driven by HER2ex20, brain metastases, and avoiding treatment-limiting adverse events including due to off-target inhibition of wild-type EGFR, which is expected to initiate phase 1 trial. The company was incorporated in 2017 and is headquartered in Cambridge, Massachusetts.

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.