Intrinsic value of Ironwood Pharmaceuticals Cl A - IRWD

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$19.61

  Intrinsic Value

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  Value-price divergence*

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$19.61

 
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*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of IRWD stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 2.9

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  82.67
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  274
  438
  677
  1,013
  1,470
  2,074
  2,851
  3,826
  5,024
  6,465
  8,166
  10,140
  12,398
  14,943
  17,779
  20,906
  24,318
  28,012
  31,982
  36,222
  40,724
  45,483
  50,495
  55,754
  61,260
  67,011
  73,007
  79,252
  85,749
  92,505
  99,526
Variable operating expenses, $m
 
  263
  406
  606
  880
  1,241
  1,707
  2,291
  3,008
  3,870
  4,889
  6,070
  7,422
  8,946
  10,643
  12,515
  14,558
  16,769
  19,146
  21,684
  24,379
  27,228
  30,228
  33,377
  36,672
  40,115
  43,705
  47,443
  51,332
  55,376
  59,580
Fixed operating expenses, $m
 
  170
  174
  179
  183
  188
  193
  197
  202
  207
  212
  218
  223
  229
  235
  240
  246
  253
  259
  265
  272
  279
  286
  293
  300
  308
  315
  323
  331
  340
  348
Total operating expenses, $m
  326
  433
  580
  785
  1,063
  1,429
  1,900
  2,488
  3,210
  4,077
  5,101
  6,288
  7,645
  9,175
  10,878
  12,755
  14,804
  17,022
  19,405
  21,949
  24,651
  27,507
  30,514
  33,670
  36,972
  40,423
  44,020
  47,766
  51,663
  55,716
  59,928
Operating income, $m
  -52
  6
  97
  228
  407
  644
  952
  1,338
  1,814
  2,387
  3,065
  3,852
  4,753
  5,769
  6,902
  8,150
  9,514
  10,991
  12,578
  14,273
  16,073
  17,977
  19,981
  22,085
  24,287
  26,588
  28,987
  31,486
  34,085
  36,788
  39,598
EBITDA, $m
  -41
  22
  122
  264
  460
  719
  1,055
  1,477
  1,996
  2,622
  3,361
  4,219
  5,201
  6,310
  7,545
  8,907
  10,394
  12,004
  13,735
  15,584
  17,547
  19,623
  21,808
  24,103
  26,504
  29,013
  31,629
  34,354
  37,188
  40,136
  43,200
Interest expense (income), $m
  24
  23
  20
  40
  69
  108
  159
  225
  308
  410
  533
  677
  845
  1,038
  1,254
  1,495
  1,761
  2,052
  2,366
  2,704
  3,065
  3,448
  3,853
  4,279
  4,726
  5,195
  5,684
  6,194
  6,726
  7,278
  7,853
Earnings before tax, $m
  -82
  -18
  77
  187
  338
  537
  792
  1,113
  1,506
  1,977
  2,532
  3,175
  3,907
  4,731
  5,647
  6,655
  7,753
  8,939
  10,212
  11,569
  13,009
  14,529
  16,129
  17,806
  19,561
  21,393
  23,303
  25,291
  27,360
  29,510
  31,745
Tax expense, $m
  0
  0
  21
  51
  91
  145
  214
  301
  407
  534
  684
  857
  1,055
  1,277
  1,525
  1,797
  2,093
  2,414
  2,757
  3,124
  3,512
  3,923
  4,355
  4,808
  5,281
  5,776
  6,292
  6,829
  7,387
  7,968
  8,571
Net income, $m
  -82
  -18
  56
  137
  246
  392
  578
  813
  1,099
  1,443
  1,848
  2,318
  2,852
  3,454
  4,123
  4,858
  5,659
  6,525
  7,455
  8,445
  9,496
  10,606
  11,774
  12,998
  14,280
  15,617
  17,011
  18,463
  19,973
  21,542
  23,174

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  305
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  710
  648
  1,000
  1,496
  2,171
  3,063
  4,211
  5,652
  7,422
  9,550
  12,062
  14,978
  18,312
  22,073
  26,262
  30,880
  35,920
  41,377
  47,242
  53,503
  60,154
  67,184
  74,586
  82,355
  90,487
  98,982
  107,839
  117,063
  126,660
  136,639
  147,011
Adjusted assets (=assets-cash), $m
  405
  648
  1,000
  1,496
  2,171
  3,063
  4,211
  5,652
  7,422
  9,550
  12,062
  14,978
  18,312
  22,073
  26,262
  30,880
  35,920
  41,377
  47,242
  53,503
  60,154
  67,184
  74,586
  82,355
  90,487
  98,982
  107,839
  117,063
  126,660
  136,639
  147,011
Revenue / Adjusted assets
  0.677
  0.676
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
Average production assets, $m
  104
  167
  257
  385
  558
  788
  1,083
  1,454
  1,909
  2,457
  3,103
  3,853
  4,711
  5,678
  6,756
  7,944
  9,241
  10,645
  12,153
  13,764
  15,475
  17,284
  19,188
  21,187
  23,279
  25,464
  27,743
  30,116
  32,585
  35,152
  37,820
Working capital, $m
  289
  -16
  -24
  -36
  -53
  -75
  -103
  -138
  -181
  -233
  -294
  -365
  -446
  -538
  -640
  -753
  -875
  -1,008
  -1,151
  -1,304
  -1,466
  -1,637
  -1,818
  -2,007
  -2,205
  -2,412
  -2,628
  -2,853
  -3,087
  -3,330
  -3,583
Total debt, $m
  373
  313
  630
  1,077
  1,684
  2,487
  3,520
  4,817
  6,409
  8,325
  10,586
  13,211
  16,211
  19,595
  23,366
  27,522
  32,058
  36,970
  42,247
  47,883
  53,868
  60,195
  66,858
  73,850
  81,169
  88,813
  96,785
  105,087
  113,724
  122,705
  132,040
Total liabilities, $m
  643
  583
  900
  1,347
  1,954
  2,757
  3,790
  5,087
  6,679
  8,595
  10,856
  13,481
  16,481
  19,865
  23,636
  27,792
  32,328
  37,240
  42,517
  48,153
  54,138
  60,465
  67,128
  74,120
  81,439
  89,083
  97,055
  105,357
  113,994
  122,975
  132,310
Total equity, $m
  67
  65
  100
  150
  217
  306
  421
  565
  742
  955
  1,206
  1,498
  1,831
  2,207
  2,626
  3,088
  3,592
  4,138
  4,724
  5,350
  6,015
  6,718
  7,459
  8,236
  9,049
  9,898
  10,784
  11,706
  12,666
  13,664
  14,701
Total liabilities and equity, $m
  710
  648
  1,000
  1,497
  2,171
  3,063
  4,211
  5,652
  7,421
  9,550
  12,062
  14,979
  18,312
  22,072
  26,262
  30,880
  35,920
  41,378
  47,241
  53,503
  60,153
  67,183
  74,587
  82,356
  90,488
  98,981
  107,839
  117,063
  126,660
  136,639
  147,011
Debt-to-equity ratio
  5.567
  4.830
  6.300
  7.200
  7.760
  8.120
  8.360
  8.520
  8.640
  8.720
  8.780
  8.820
  8.850
  8.880
  8.900
  8.910
  8.920
  8.930
  8.940
  8.950
  8.960
  8.960
  8.960
  8.970
  8.970
  8.970
  8.970
  8.980
  8.980
  8.980
  8.980
Adjusted equity ratio
  -0.588
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -82
  -18
  56
  137
  246
  392
  578
  813
  1,099
  1,443
  1,848
  2,318
  2,852
  3,454
  4,123
  4,858
  5,659
  6,525
  7,455
  8,445
  9,496
  10,606
  11,774
  12,998
  14,280
  15,617
  17,011
  18,463
  19,973
  21,542
  23,174
Depreciation, amort., depletion, $m
  11
  16
  25
  37
  53
  75
  103
  139
  182
  234
  296
  367
  449
  541
  643
  757
  880
  1,014
  1,157
  1,311
  1,474
  1,646
  1,827
  2,018
  2,217
  2,425
  2,642
  2,868
  3,103
  3,348
  3,602
Funds from operations, $m
  -30
  -2
  81
  174
  300
  467
  682
  951
  1,281
  1,677
  2,144
  2,685
  3,301
  3,995
  4,766
  5,615
  6,540
  7,539
  8,612
  9,756
  10,970
  12,252
  13,601
  15,016
  16,497
  18,042
  19,653
  21,331
  23,076
  24,890
  26,776
Change in working capital, $m
  -5
  -6
  -9
  -12
  -16
  -22
  -28
  -35
  -43
  -52
  -61
  -71
  -81
  -92
  -102
  -113
  -123
  -133
  -143
  -153
  -162
  -171
  -180
  -189
  -198
  -207
  -216
  -225
  -234
  -243
  -253
Cash from operations, $m
  -25
  87
  90
  186
  316
  489
  710
  986
  1,324
  1,729
  2,205
  2,756
  3,382
  4,086
  4,868
  5,727
  6,662
  7,672
  8,755
  9,909
  11,132
  12,424
  13,782
  15,206
  16,695
  18,249
  19,869
  21,556
  23,310
  25,133
  27,029
Maintenance CAPEX, $m
  0
  -10
  -16
  -25
  -37
  -53
  -75
  -103
  -138
  -182
  -234
  -296
  -367
  -449
  -541
  -643
  -757
  -880
  -1,014
  -1,157
  -1,311
  -1,474
  -1,646
  -1,827
  -2,018
  -2,217
  -2,425
  -2,642
  -2,868
  -3,103
  -3,348
New CAPEX, $m
  -104
  -63
  -91
  -128
  -174
  -229
  -295
  -371
  -455
  -547
  -646
  -750
  -858
  -967
  -1,078
  -1,188
  -1,297
  -1,404
  -1,509
  -1,611
  -1,711
  -1,809
  -1,904
  -1,999
  -2,092
  -2,185
  -2,279
  -2,373
  -2,469
  -2,567
  -2,668
Cash from investing activities, $m
  -178
  -73
  -107
  -153
  -211
  -282
  -370
  -474
  -593
  -729
  -880
  -1,046
  -1,225
  -1,416
  -1,619
  -1,831
  -2,054
  -2,284
  -2,523
  -2,768
  -3,022
  -3,283
  -3,550
  -3,826
  -4,110
  -4,402
  -4,704
  -5,015
  -5,337
  -5,670
  -6,016
Free cash flow, $m
  -203
  15
  -17
  34
  106
  206
  339
  512
  731
  1,000
  1,325
  1,710
  2,157
  2,670
  3,250
  3,896
  4,609
  5,388
  6,233
  7,140
  8,111
  9,141
  10,231
  11,379
  12,585
  13,847
  15,165
  16,540
  17,973
  19,463
  21,013
Issuance/(repayment) of debt, $m
  -29
  -54
  318
  446
  607
  803
  1,033
  1,297
  1,593
  1,915
  2,261
  2,625
  3,001
  3,384
  3,771
  4,156
  4,537
  4,911
  5,278
  5,636
  5,985
  6,327
  6,662
  6,992
  7,319
  7,645
  7,972
  8,302
  8,637
  8,981
  9,335
Issuance/(repurchase) of shares, $m
  25
  37
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -4
  -17
  318
  446
  607
  803
  1,033
  1,297
  1,593
  1,915
  2,261
  2,625
  3,001
  3,384
  3,771
  4,156
  4,537
  4,911
  5,278
  5,636
  5,985
  6,327
  6,662
  6,992
  7,319
  7,645
  7,972
  8,302
  8,637
  8,981
  9,335
Total cash flow (excl. dividends), $m
  -207
  -40
  301
  480
  713
  1,009
  1,372
  1,810
  2,323
  2,915
  3,586
  4,334
  5,158
  6,054
  7,020
  8,052
  9,146
  10,299
  11,510
  12,776
  14,096
  15,468
  16,893
  18,372
  19,904
  21,492
  23,137
  24,842
  26,610
  28,444
  30,347
Retained Cash Flow (-), $m
  28
  -297
  -35
  -50
  -67
  -89
  -115
  -144
  -177
  -213
  -251
  -292
  -333
  -376
  -419
  -462
  -504
  -546
  -586
  -626
  -665
  -703
  -740
  -777
  -813
  -849
  -886
  -922
  -960
  -998
  -1,037
Prev. year cash balance distribution, $m
 
  299
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  0
  265
  430
  646
  919
  1,258
  1,665
  2,146
  2,703
  3,335
  4,043
  4,825
  5,678
  6,601
  7,590
  8,642
  9,754
  10,924
  12,150
  13,431
  14,765
  16,153
  17,595
  19,091
  20,642
  22,251
  23,920
  25,650
  27,446
  29,310
Discount rate, %
 
  6.90
  7.25
  7.61
  7.99
  8.39
  8.81
  9.25
  9.71
  10.19
  10.70
  11.24
  11.80
  12.39
  13.01
  13.66
  14.34
  15.06
  15.81
  16.61
  17.44
  18.31
  19.22
  20.18
  21.19
  22.25
  23.37
  24.53
  25.76
  27.05
  28.40
PV of cash for distribution, $m
 
  0
  231
  345
  475
  615
  758
  897
  1,023
  1,128
  1,206
  1,253
  1,265
  1,244
  1,191
  1,112
  1,012
  898
  777
  656
  540
  432
  338
  256
  189
  136
  95
  64
  42
  27
  16
Current shareholders' claim on cash, %
  100
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0

Ironwood Pharmaceuticals, Inc., a commercial biotechnology company, engages in the research, development, and commercialization of human therapeutic products. The company markets linaclotide, a guanylate cyclase type-C agonist for the treatment of adults suffering from irritable bowel syndrome with constipation or chronic idiopathic constipation (CIC) under the LINZESS name in the United States and Constella name in the European Union; and lesinurad for the treatment of hyperuricemia associated with uncontrolled gout under ZURAMPIC and DUZALLO names. It has collaboration agreements with Allergan plc and AstraZeneca AB to develop and commercialize linaclotide for the treatment of IBS-C, CIC, and other GI conditions in North America, China, Hong Kong, and Macau; and license agreement with Astellas Pharma Inc. to develop and commercialize linaclotide for the treatment of IBS-C, chronic constipation, and other GI conditions in Japan. The company was formerly known as Microbia, Inc. and changed its name to Ironwood Pharmaceuticals, Inc. in April 2008. Ironwood Pharmaceuticals, Inc. was founded in 1998 and is headquartered in Cambridge, Massachusetts.

FINANCIAL RATIOS  of  Ironwood Pharmaceuticals Cl A (IRWD)

Valuation Ratios
P/E Ratio -35.3
Price to Sales 10.6
Price to Book 43.1
Price to Tangible Book
Price to Cash Flow -115.6
Price to Free Cash Flow -22.4
Growth Rates
Sales Growth Rate 82.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 2500%
Cap. Spend. - 3 Yr. Gr. Rate 59.7%
Financial Strength
Quick Ratio 51
Current Ratio 0
LT Debt to Equity 547.8%
Total Debt to Equity 556.7%
Interest Coverage -2
Management Effectiveness
Return On Assets -8.7%
Ret/ On Assets - 3 Yr. Avg. -30%
Return On Total Capital -17.9%
Ret/ On T. Cap. - 3 Yr. Avg. -45.3%
Return On Equity -101.2%
Return On Equity - 3 Yr. Avg. -185.3%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 99.3%
Gross Margin - 3 Yr. Avg. 88.8%
EBITDA Margin -17.2%
EBITDA Margin - 3 Yr. Avg. -99%
Operating Margin -19%
Oper. Margin - 3 Yr. Avg. -103.6%
Pre-Tax Margin -29.9%
Pre-Tax Margin - 3 Yr. Avg. -125.1%
Net Profit Margin -29.9%
Net Profit Margin - 3 Yr. Avg. -125.1%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

IRWD stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the IRWD stock intrinsic value calculation we used $274 million for the last fiscal year's total revenue generated by Ironwood Pharmaceuticals Cl A. The default revenue input number comes from 2016 income statement of Ironwood Pharmaceuticals Cl A. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our IRWD stock valuation model: a) initial revenue growth rate of 60% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 6.9%, whose default value for IRWD is calculated based on our internal credit rating of Ironwood Pharmaceuticals Cl A, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Ironwood Pharmaceuticals Cl A.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of IRWD stock the variable cost ratio is equal to 59.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $166 million in the base year in the intrinsic value calculation for IRWD stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 6.4% for Ironwood Pharmaceuticals Cl A.

Corporate tax rate of 27% is the nominal tax rate for Ironwood Pharmaceuticals Cl A. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the IRWD stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for IRWD are equal to 38%.

Life of production assets of 10.5 years is the average useful life of capital assets used in Ironwood Pharmaceuticals Cl A operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for IRWD is equal to -3.6%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $67 million for Ironwood Pharmaceuticals Cl A - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 149.133 million for Ironwood Pharmaceuticals Cl A is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Ironwood Pharmaceuticals Cl A at the current share price and the inputted number of shares is $2.9 billion.


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COMPANY NEWS

▶ Is Ironwood's Growth About to Slow?   [Jun-05-17 09:01AM  Motley Fool]
▶ Ironwood reports 1Q loss   [08:18AM  Associated Press]
▶ Synergy Pharmaceuticals: Approval, Now What?   [Mar-13-17 09:29AM  Motley Fool]
▶ [$$] Celebrating Failure in a Tough Drug Industry   [Mar-03-17 11:11PM  The Wall Street Journal]
▶ Ironwood Pharmaceuticals to Host R&D Day on March 9, 2017   [Feb-23-17 04:01PM  Business Wire]
▶ Cambridge's Ironwood reports positive data on constipation drug   [Dec-22-16 11:20AM  at bizjournals.com]
▶ Is Kite Realty Group Trust (KRG) A Good Stock To Buy?   [Dec-12-16 05:35PM  at Insider Monkey]
▶ Hedge Funds Are Buying Ironwood Pharmaceuticals, Inc. (IRWD)   [Nov-29-16 06:53PM  at Insider Monkey]
Stock chart of IRWD Financial statements of IRWD Annual reports of IRWD
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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