Why Ironwood Pharmaceuticals (IRWD) is Poised to Beat Earnings Estimates (Again) - Tale of the Tape


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Looking for a stock that might be in a good position to beat earnings at its next report? Consider Ironwood Pharmaceuticals, Inc. ( IRWD ), a firm in the Medical Drug Industry, which could be a great candidate for another beat.

This company has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. In fact, in these reports, IRWD has beaten estimates by at least 10% in both cases, suggesting it has a nice short-term history of crushing expectations.

Earnings in Focus

Two quarters ago, IRWD projected to incur a loss of 58 cents, but reported narrower loss of 51 cents per share, a beat of 12.1%. Meanwhile, for the most recent quarter, the company expected to deliver a loss of 50 cents per share, when it actually saw a narrower loss of 43 cents per share instead, representing a 14.0% positive surprise.

Thanks in part to this history, recent estimates have been moving higher for Ironwood Pharmaceuticals. In fact, the Earnings ESP for IRWD is positive, which is a great sign of a coming beat.

After all, the Zacks Earnings ESP compares the most accurate estimate to the broad consensus, looking to find stocks that have seen big revisions as of late, suggesting that analysts have recently become more bullish on the company's earnings prospects. This is the case for IRWD, as the firm currently has a Zacks Earnings ESP of 4.44%, so another beat could be around the corner.

This is particularly true when you consider that IRWD has a great Zacks Rank #2 (Buy) which can be a harbinger of outperformance and a signal for a strong earnings profile. And when you add this solid Zacks Rank to a positive Earnings ESP, a positive earnings surprise happens nearly 70% of the time, so it seems pretty likely that IRWD could see another beat at its next report, especially if recent trends are any guide.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Earnings , Investing Ideas , Stocks

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