Ironwood Pharmaceuticals (NASDAQ:IRWD) versus Citius Pharmaceuticals (NASDAQ:CTXR) Critical Analysis

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

Insider and Institutional Ownership

16.9% of Citius Pharmaceuticals shares are held by institutional investors. 12.7% of Ironwood Pharmaceuticals shares are held by company insiders. Comparatively, 10.7% of Citius Pharmaceuticals shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and price targets for Ironwood Pharmaceuticals and Citius Pharmaceuticals, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ironwood Pharmaceuticals	1	6	1	0	2.00
Citius Pharmaceuticals	1	2	1	0	2.00

Ironwood Pharmaceuticals currently has a consensus price target of $5.34, indicating a potential upside of 52.57%. Citius Pharmaceuticals has a consensus price target of $6.00, indicating a potential upside of 321.05%. Given Citius Pharmaceuticals’ higher possible upside, analysts plainly believe Citius Pharmaceuticals is more favorable than Ironwood Pharmaceuticals.

Risk & Volatility

Ironwood Pharmaceuticals has a beta of 0.37, indicating that its share price is 63% less volatile than the S&P 500. Comparatively, Citius Pharmaceuticals has a beta of 1.43, indicating that its share price is 43% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ironwood Pharmaceuticals	-2.25%	-2.46%	2.19%
Citius Pharmaceuticals	N/A	-60.03%	-33.83%

Valuation and Earnings

This table compares Ironwood Pharmaceuticals and Citius Pharmaceuticals”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ironwood Pharmaceuticals	$338.99 million	1.68	$880,000.00	$0.16	21.88
Citius Pharmaceuticals	N/A	N/A	-$39.14 million	($3.37)	-0.42

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

Summary

Ironwood Pharmaceuticals beats Citius Pharmaceuticals on 6 of the 11 factors compared between the two stocks.

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.

About Citius Pharmaceuticals

Citius Pharmaceuticals, Inc., a late-stage pharmaceutical company, engages in the development and commercialization of critical care products focusing on oncology products, anti-infectives products in adjunct cancer care, prescription products, and stem cell therapy. It is developing five proprietary products comprising LYMPHIR, an engineered IL-2 diphtheria toxin fusion protein for the treatment of patients with persistent or recurrent cutaneous T-cell lymphoma, which is in Phase 3 clinical trial; Mino-Lok, an antibiotic lock solution to treat patients with catheter-related bloodstream infections by salvaging the infected catheter, which is in Phase 3 clinical trial; Halo-Lido, a corticosteroid-lidocaine topical formulation that intends to provide anti-inflammatory and anesthetic relief to persons suffering from hemorrhoids that is in clinical Phase 2b trial; Mino-Wrap, a liquifying gel-based wrap for reduction of tissue expander infections following breast reconstructive surgeries; and NoveCite, a mesenchymal stem cell therapy for the treatment of acute respiratory disease syndrome. The company was founded in 2007 and is headquartered in Cranford, New Jersey.