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

Analyst Ratings

This is a summary of current ratings for Merrimack Pharmaceuticals and Ironwood Pharmaceuticals, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Merrimack Pharmaceuticals 0 4 0 0 2.00
Ironwood Pharmaceuticals 0 5 4 0 2.44

Merrimack Pharmaceuticals presently has a consensus price target of $60.00, indicating a potential upside of 337.64%. Ironwood Pharmaceuticals has a consensus price target of $18.13, indicating a potential upside of 19.24%. Given Merrimack Pharmaceuticals’ higher probable upside, equities analysts plainly believe Merrimack Pharmaceuticals is more favorable than Ironwood Pharmaceuticals.

Insider & Institutional Ownership

46.7% of Merrimack Pharmaceuticals shares are held by institutional investors. Comparatively, 98.0% of Ironwood Pharmaceuticals shares are held by institutional investors. 8.5% of Merrimack Pharmaceuticals shares are held by insiders. Comparatively, 7.6% of Ironwood Pharmaceuticals shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Merrimack Pharmaceuticals has a beta of 2.02, meaning that its share price is 102% more volatile than the S&P 500. Comparatively, Ironwood Pharmaceuticals has a beta of 1.48, meaning that its share price is 48% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Merrimack Pharmaceuticals -105.18% N/A -99.74%
Ironwood Pharmaceuticals -52.97% -333.83% -18.83%

Earnings & Valuation

This table compares Merrimack Pharmaceuticals and Ironwood Pharmaceuticals’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Merrimack Pharmaceuticals $144.27 million 1.26 -$87.01 million $31.50 0.44
Ironwood Pharmaceuticals $270.81 million 7.58 -$84.77 million ($0.98) -15.51

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

Summary

Ironwood Pharmaceuticals beats Merrimack Pharmaceuticals on 8 of the 13 factors compared between the two stocks.

About Merrimack Pharmaceuticals

Merrimack Pharmaceuticals, Inc. is a biopharmaceutical company. The Company is engaged in discovering, developing and commercializing medicines consisting of therapeutics paired with companion diagnostics for the treatment of cancer. The Company has one marketed therapeutic oncology product and multiple targeted therapeutic oncology candidates in clinical development. Its advanced program is its therapeutic MM-398, which it markets in the United States under the brand name ONIVYDE. Its other clinical stage product candidates include MM-121, MM-141, MM-310, MM-302 and MM-151. The Company is developing in vitro and in vivo diagnostics for use with each of its oncology therapeutic product candidates. Its in vitro diagnostic agents employ biophysical or biochemical markers of cancer, or biomarkers. Its in vivo diagnostics take the form of imaging agents that may help identify patients likely to benefit from its therapeutic products by measuring deposition of its products in the tumor.

About Ironwood Pharmaceuticals

Ironwood Pharmaceuticals, Inc. is a biotechnology company. The Company is advancing product opportunities in areas of unmet need, including irritable bowel syndrome with constipation (IBS C), and chronic idiopathic constipation (CIC), hyperuricemia associated with uncontrolled gout, uncontrolled gastroesophageal reflux disease (uncontrolled GERD), and vascular and fibrotic diseases. It operates in human therapeutics business segment. Its product, linaclotide, is available to adult men and women suffering from IBS C or CIC in the United States under the trademarked name LINZESS, and is available to adult men and women suffering from IBS C in certain European countries under the trademarked name CONSTELLA. It is also advancing IW-3718, a gastric retentive formulation of a bile acid sequestrant with the potential to provide symptomatic relief in patients with uncontrolled GERD. Its vascular/fibrotic programs include IW-1973 and IW-1701, which targets soluble guanylate cyclase (sGC).

Receive News & Stock Ratings for Merrimack Pharmaceuticals Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Merrimack Pharmaceuticals Inc. and related stocks with our FREE daily email newsletter.