Rhythm Pharmaceuticals (RYTM) AI Stock Analysis

• Market Cap: $7.48B
• Dividend Yield: N/A
• Average Volume (3M): 873.47K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.59
• Revenue Growth: 54.92%
• EPS Growth: 28.47%
• Country: US
• Employees: 283
• Sector: Healthcare
• Sector Strength: 45
• Industry: Biotechnology
• EPS (TTM): -0.82
• Shares Outstanding: 66,736,050
• 10 Day Avg. Volume: 1,306,262
• 30 Day Avg. Volume: 873,468
• PEG Ratio: -0.37
• Price to Book (P/B): 20.75
• Price to Sales (P/S): 26.24
• P/FCF Ratio: -29.98
• Enterprise Value/Market Cap: 0.88
• Enterprise Value/Revenue: 37.84
• Enterprise Value/Gross Profit: 42.33
• Enterprise Value/Ebitda: -39.03
• 1Y Price Target: $139.62
• Price Target Upside: 24.50% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 15
• EPS Forecast (FY): -3.14
• Revenue Forecast (FY): $187.97M

• Rating: 59 Neutral
• Price Target: $123.00 ▲(9.68% Upside)

Rhythm Pharmaceuticals' overall stock score is driven by strong technical indicators and positive corporate events, such as promising trial results and regulatory progress. However, financial performance and valuation remain weak due to ongoing profitability challenges and a negative P/E ratio. The earnings call provided a positive sentiment, highlighting revenue growth and strategic initiatives, which slightly offset the financial weaknesses.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market adoption of setmelanotide and supports the company's financial stability and expansion efforts.

Regulatory Progress

Regulatory acceptance for IMCIVREE in new indications enhances market potential and strengthens Rhythm's position in addressing genetic obesity disorders.

Clinical Trial Success

Successful trial results in PWS demonstrate therapeutic potential and pave the way for Phase 3 trials, expanding Rhythm's product pipeline and market reach.

Negative Factors

Profitability Challenges

Ongoing profitability issues may limit reinvestment in R&D and expansion, potentially hindering long-term growth and market competitiveness.

Rising R&D Costs

Increasing R&D costs could strain financial resources, impacting cash flow and necessitating careful management to sustain innovation and development.

International Revenue Challenges

Declining international revenue highlights market challenges and could affect overall revenue growth, necessitating strategic adjustments to improve global sales.

Rhythm Pharmaceuticals Business Overview & Revenue Model

Company Description

Rhythm Pharmaceuticals, Inc. is a biotechnology company focused on developing innovative therapeutics for the treatment of rare genetic disorders of obesity. The company primarily operates in the healthcare sector, specifically within the pharmaceutical industry, and is known for its proprietary product, setmelanotide, which targets the melanocortin-4 receptor pathway to address obesity caused by genetic deficiencies. Rhythm is dedicated to advancing the understanding of genetic obesity and aims to provide effective solutions for patients with rare obesity syndromes.

How the Company Makes Money

Rhythm Pharmaceuticals generates revenue primarily through the commercialization of its lead product, setmelanotide, which is marketed under the brand name Imcivree. The company earns income from product sales to healthcare providers and patients. Additionally, Rhythm may engage in collaborations or licensing agreements with other pharmaceutical companies to expand its reach and share in the development of new therapies or indications. Research grants and funding from government or non-profit organizations focused on obesity and metabolic disorders also contribute to its financial resources. The company's revenue model is heavily influenced by the successful uptake of its product in the market, reimbursement policies, and the growing awareness of genetic obesity disorders.

Rhythm Pharmaceuticals Financial Statement Overview

Summary

Rhythm Pharmaceuticals shows a positive revenue growth trend with a TTM revenue growth rate of 11.55%. However, the company is struggling with profitability, as indicated by negative net profit margins and EBIT margins. The gross profit margin remains strong at 89.40% TTM, suggesting efficient cost management, but the overall profitability is hindered by high operating expenses. The balance sheet reveals a high debt-to-equity ratio of 1.56 in the previous year, which has improved to 0.00 in the TTM, indicating reduced leverage. However, the return on equity remains negative, reflecting ongoing losses. The cash flow statement shows a significant improvement in free cash flow growth at 61.14% TTM. The operating cash flow to net income ratio is positive, suggesting some operational efficiency. However, the company still faces challenges with negative operating cash flow, indicating a need for better cash management.

Income Statement

Rhythm Pharmaceuticals shows a positive revenue growth trend with a TTM revenue growth rate of 11.55%. However, the company is struggling with profitability, as indicated by negative net profit margins and EBIT margins. The gross profit margin remains strong at 89.40% TTM, suggesting efficient cost management, but the overall profitability is hindered by high operating expenses.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 1.56 in the previous year, which has improved to 0.00 in the TTM, indicating reduced leverage. However, the return on equity remains negative, reflecting ongoing losses. The equity ratio is not explicitly calculated, but the company's equity position appears stable relative to its assets.

Cash Flow

The cash flow statement shows a significant improvement in free cash flow growth at 61.14% TTM. The operating cash flow to net income ratio is positive, suggesting some operational efficiency. However, the company still faces challenges with negative operating cash flow, indicating a need for better cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	174.33M	130.13M	77.43M	23.64M	3.15M	0.00
Gross Profit	155.86M	116.76M	68.13M	21.50M	2.56M	-690.00K
EBITDA	-169.02M	-238.09M	-168.46M	-174.25M	-68.45M	-135.88M
Net Income	-192.33M	-260.60M	-184.68M	-181.12M	-69.61M	-130.73M
Balance Sheet
Total Assets	506.87M	392.27M	332.75M	382.48M	329.52M	187.07M
Cash, Cash Equivalents and Short-Term Investments	416.05M	320.56M	275.85M	333.29M	294.86M	172.79M
Total Debt	151.00M	3.94M	1.26M	1.94M	2.55M	3.09M
Total Liabilities	358.06M	227.72M	162.99M	118.22M	45.37M	20.55M
Stockholders Equity	148.82M	164.55M	169.76M	264.26M	284.15M	166.53M
Cash Flow
Free Cash Flow	-109.13M	-113.88M	-136.20M	-177.71M	-151.44M	-122.19M
Operating Cash Flow	-109.13M	-113.88M	-136.16M	-173.43M	-146.00M	-121.98M
Investing Cash Flow	-146.34M	-48.17M	-5.67M	28.03M	-62.16M	158.53M
Financing Cash Flow	259.24M	191.24M	74.37M	213.83M	166.48M	2.01M

Rhythm Pharmaceuticals Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 112.14
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RYTM, the sentiment is Positive. The current price of 112.14 is above the 20-day moving average (MA) of 108.43, above the 50-day MA of 106.65, and above the 200-day MA of 83.53, indicating a bullish trend. The MACD of 2.36 indicates Negative momentum. The RSI at 58.33 is Neutral, neither overbought nor oversold. The STOCH value of 55.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RYTM.

Rhythm Pharmaceuticals Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TGTX	65 Neutral	$4.92B	11.15	111.96%	―	100.88%	―
RNA	62 Neutral	$10.91B	―	-32.44%	―	106.27%	-43.90%
ABVX	60 Neutral	$9.13B	-38.01	―	―	―	18.47%
RYTM	59 Neutral	$7.48B	-36.14	-240.36%	―	54.92%	28.47%
CYTK	57 Neutral	$7.67B	-9.94	―	―	2609.26%	-17.08%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
LEGN	46 Neutral	$4.05B	-16.79	-22.60%	―	74.91%	31.54%

Rhythm Pharmaceuticals Corporate Events

Rhythm Pharmaceuticals Announces Resignation of Board Member Bedrosian

On December 16, 2025, Rhythm Pharmaceuticals announced that board member Camille L. Bedrosian, M.D. resigned from the company’s Board of Directors, effective immediately. Bedrosian, who served on the Compensation & Management Development Committee and the Governance and Nominating Committee, left her roles without any disagreement related to the company’s operations, policies or practices, suggesting the departure is not expected to signal governance or strategic conflict for stakeholders.

Rhythm Pharmaceuticals Announces Positive Phase 2 Trial Results

On December 11, 2025, Rhythm Pharmaceuticals announced positive preliminary results from its exploratory Phase 2 trial of setmelanotide in patients with Prader-Willi syndrome (PWS). The trial, which enrolled 18 patients, showed potential therapeutic benefits with reductions in BMI and hyperphagia at Months 3 and 6. Encouraged by these results, Rhythm plans to advance setmelanotide into a Phase 3 trial and has initiated a Phase 1 study of another MC4R agonist, RM-718, in PWS patients. The announcement underscores the company’s commitment to addressing the unmet needs of the PWS patient population, which faces significant health challenges due to severe obesity and hyperphagia.

Rhythm Pharmaceuticals Faces FDA Review Extension

On November 7, 2025, Rhythm Pharmaceuticals announced that the FDA extended the review period for the supplemental New Drug Application for IMCIVREE® (setmelanotide) for acquired hypothalamic obesity by three months, moving the PDUFA goal date to March 20, 2026. This extension follows the FDA’s request for additional sensitivity analyses of clinical efficacy data, which were considered a major amendment. The company remains confident in the drug’s potential and is preparing to deliver it to a patient community with no approved treatment options.