The latest analyst coverage could presage a bad day for Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the latest downgrade, the six analysts covering Ironwood Pharmaceuticals provided consensus estimates of US$356m revenue in 2024, which would reflect a not inconsiderable 11% decline on its sales over the past 12 months. Before the latest update, the analysts were foreseeing US$410m of revenue in 2024. The consensus view seems to have become more pessimistic on Ironwood Pharmaceuticals, noting the measurable cut to revenue estimates in this update.

Check out our latest analysis for Ironwood Pharmaceuticals

The consensus price target fell 21% to US$12.50, with the analysts clearly less optimistic about Ironwood Pharmaceuticals' valuation following this update.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 21% by the end of 2024. This indicates a significant reduction from annual growth of 0.6% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 23% annually for the foreseeable future. It's pretty clear that Ironwood Pharmaceuticals' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Ironwood Pharmaceuticals this year. They also expect company revenue to perform worse than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Ironwood Pharmaceuticals going forwards.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Ironwood Pharmaceuticals' financials, such as a weak balance sheet. For more information, you can click here to discover this and the 4 other concerns we've identified.

We also provide an overview of the Ironwood Pharmaceuticals Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.