Ironwood Pharmaceuticals, Inc. (IRWD): fair value, margin of safety and Wheel Score

Is IRWD undervalued?

At 3.77 (close of 16 Oct 2026), IRWD trades 69% below the GLS average fair value of 12.28. That average comes from 7 models run on the latest filings, and 5 of them land above the current price. Margins of safety over 30% are the exception rather than the rule across the ~7,400 stocks we value each night, so the number earns Ironwood Pharmaceuticals, Inc. the full Value points in the Wheel Score - and a closer look at what the market is pricing in.

The 7 models disagree widely: GLS Growth gives 2.30 while 10 Cap gives 31.80. A spread that wide means the average is sensitive to which methods you trust; the model table below shows where each one lands, and the Quote page lets you switch any of them off.

The nightly engine files IRWD under Value: positive earnings at a P/E of 18 or less.

Nine valuation models for IRWD

Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.

Quality and financial health

On financial health IRWD scores 7/9 (Piotroski): most of the nine tests - positive earnings and cash flow, falling debt, rising margins and turnover - are passed, which is the kind of balance sheet a wheel trader is happy to be assigned. The GLS Moat score is low at 2.4 out of 10, which says the ten-year record of revenue, earnings, margins and returns on capital has been inconsistent - growth and shocks rather than steady compounding.

Returns on capital are moderate - ROIC 7.1%, ROE -9.2%, ROA 6.1% - with debt at -2.28 times equity and a free-cash-flow yield of 29.8%.

Ironwood Pharmaceuticals, Inc. pays no dividend, so the DDM model does not apply and a covered-call holder earns only the premium and any price gain. Revenue comes mainly from Royalty 74%, Collaborative Arrangement, Collaboratio… 27% (quarter Q2 FY2026).

Institutional ownership scores 10/10, insider activity 1/10 and Congressional trading 5/10 on the GLS smart-money scales.

Wheel Score 69: Good

IRWD scores 69 out of 100 on the Wheel Score (Good band, 65-79). The score blends the margin of safety (Value, 25/25), Piotroski health (16/20), the GLS moat (4/15), the option premium on offer (10/20) and how easily the stock trades (15/20). Moat (4/15) is the part holding the score back.

Implied volatility is 100% on the near-the-money contracts 20-60 days out - above the 60% ceiling of the sweet spot. Premiums are large, but the Wheel Score tapers the Premium points (10 of 20) because volatility this high usually comes with a reason. Chain open interest is 9,413 contracts across all expiries - enough for the wheel at normal size.

Volume runs at 2.0M shares a day on a market cap of $623M, with a beta of 0.22 - a low beta, so day-to-day moves are smaller than the market's; the Stability part of the Wheel Score gives that 15 of 20.

The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.

Upcoming events

The next earnings report is due on 9 Nov 2026 (before the open), 24 days away; a 30-45-day put sold today would expire after it, which is worth weighing against the premium.

Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.

Similar stocks in Drug Manufacturers - Specialty & Generic

The 12 companies below are the closest to Ironwood Pharmaceuticals, Inc. by market cap within the Drug Manufacturers - Specialty & Generic industry, each with its own fact sheet; the Compare page puts up to eight of them side by side.

⚖ Compare IRWD with 7 of them   All Healthcare stocks →