Is Ironwood Pharmaceuticals, Inc. overvalued or undervalued?

As of 8 August 2023, Ironwood Pharmaceuticals, Inc. has moved from an attractive to a risky valuation grade. The company is currently considered overvalued given its financial metrics and peer comparisons. The P/E ratio is not applicable as the company is loss-making, while the EV to EBITDA stands at 6.72 and the EV to Sales is at 1.82. Notably, the ROCE is a high 57.96%, but this is overshadowed by negative book value for ROE.
In terms of peer comparison, Ironwood's valuation is significantly weaker than that of PTC Therapeutics, Inc., which has a P/E of 5.42 and an EV to EBITDA of 2.57. Other peers like Xenon Pharmaceuticals, Inc. and IDEAYA Biosciences, Inc. also show negative P/E ratios, indicating a challenging environment for Ironwood. The company's stock has underperformed significantly over the past year, down 88.94% compared to a 10.26% gain in the S&P 500, reinforcing the notion that it is currently overvalued.