Head-To-Head Contrast: Ironwood Pharmaceuticals (IRWD) versus Zai Lab (ZLAB)

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

Profitability

This table compares Ironwood Pharmaceuticals and Zai Lab’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ironwood Pharmaceuticals -82.15% N/A -29.59%
Zai Lab N/A N/A N/A

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ironwood Pharmaceuticals $298.28 million 7.00 -$116.93 million ($0.93) -14.57
Zai Lab N/A N/A -$50.38 million ($2.32) -12.31

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

Risk & Volatility

Ironwood Pharmaceuticals has a beta of 1.91, meaning that its stock price is 91% more volatile than the S&P 500. Comparatively, Zai Lab has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for Ironwood Pharmaceuticals and Zai Lab, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ironwood Pharmaceuticals 2 5 5 0 2.25
Zai Lab 0 0 4 0 3.00

Ironwood Pharmaceuticals currently has a consensus price target of $17.28, suggesting a potential upside of 27.51%. Zai Lab has a consensus price target of $36.57, suggesting a potential upside of 27.99%. Given Zai Lab’s stronger consensus rating and higher probable upside, analysts plainly believe Zai Lab is more favorable than Ironwood Pharmaceuticals.

Insider & Institutional Ownership

93.9% of Ironwood Pharmaceuticals shares are owned by institutional investors. Comparatively, 34.5% of Zai Lab shares are owned by institutional investors. 7.6% of Ironwood Pharmaceuticals shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Ironwood Pharmaceuticals Company Profile

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 (IBS-C) 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 in adults under the ZURAMPIC and DUZALLO names. Ironwood Pharmaceuticals, Inc. has collaboration agreements with Allergan plc and AstraZeneca AB to develop and commercialize linaclotide for the treatment of IBS-C, CIC, and other gastrointestinal (GI) conditions in North America, China, Hong Kong, and Macau; and Nicox SA to generate various therapeutics for the treatment of certain ophthalmic conditions, as well as a license agreement with Astellas Pharma Inc. to develop and commercialize linaclotide for the treatment of IBS-C, CIC, 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.

Zai Lab Company Profile

Zai Lab Limited, a biopharmaceutical company, engages in discovering or licensing, developing, and commercializing proprietary therapeutics that address medical needs in the fields of oncology, and autoimmune and infectious disease therapies in the People's Republic of China. Its drug candidates include ZL-2306, a poly ADP ribose polymerase 1/2 inhibitor, which is in Phase III clinical trial for the treatment of ovarian, lung, and breast cancers; ZL-2401, an antibiotic that is in Phase III clinical trial to treat ABSSSI, CABP, and UTI; FPA144, a humanized monoclonal antibody, which is in Phase I/III clinical trial to treat gastric and gastroesophageal cancer; ETX2514, a novel ß-lactamase inhibitor that is in Phase II cUTI trial for the treatment of acinetobacter baumannii; and ZL-2301, which is in Phase III clinical trial to treat HCC. The company's drug candidates also comprise ZL-3101, a novel steroid-sparing topical product that is in Phase II clinical trial for the treatment of eczema and psoriasis; and ZL-2302 to treat non-small cell lung cancer. The company, through its subsidiary, Zai Lab (Shanghai) Co. Ltd., has a collaboration agreement with the NovoCure Limited to perform clinical studies, sell, and import tumor treating field products in the field of oncology. Zai Lab Limited was founded in 2013 and is headquartered in Shanghai, the People's Republic of China.

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