Rhythm Pharmaceuticals (RYTM) AI Stock Analysis

• Market Cap: $6.15B
• Dividend Yield: N/A
• Average Volume (3M): 726.99K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.54
• Revenue Growth: 54.92%
• EPS Growth: 28.47%
• Country: US
• Employees: 283
• Sector: Healthcare
• Sector Strength: 45
• Industry: Biotechnology
• EPS (TTM): -0.73
• Shares Outstanding: 68,285,040
• 10 Day Avg. Volume: 876,591
• 30 Day Avg. Volume: 726,992
• PEG Ratio: 1.25
• Price to Book (P/B): 50.02
• Price to Sales (P/S): 36.66
• P/FCF Ratio: -59.64
• Enterprise Value/Market Cap: 1.03
• Enterprise Value/Revenue: 33.41
• Enterprise Value/Gross Profit: 37.23
• Enterprise Value/Ebitda: -36.41
• 1Y Price Target: $139.54
• Price Target Upside: 55.01% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 13
• EPS Forecast (FY): -3.03
• Revenue Forecast (FY): $290.27M

• Rating: 50 Neutral
• Price Target: $93.00 ▲(3.31% Upside)
• Action: Reiterated Date: 03/02/26
• Date: Action: Reiterated 03/02/26

Overall score reflects a mix of strong commercial traction and high gross margins with low balance-sheet leverage, but materially offset by ongoing cash burn and losses. Technicals also weigh on the score given the stock is below key moving averages with bearish momentum. Earnings-call guidance adds both upside (near-term regulatory catalysts and stated runway) and risk (higher 2026 spend and execution/inventory headwinds).

Positive Factors

High gross margins & revenue scaling

Consistently very high gross margins (~88–91%) paired with meaningful revenue scale to ~$190M indicate durable unit economics. Strong margins support long-term profitability potential as volume and reimbursement stabilize, helping absorb fixed commercial and R&D spend.

Low leverage / conservative balance sheet

Extremely low debt relative to equity reduces insolvency and refinancing risk, giving the company flexibility to fund trials, inventory and launches without heavy interest burdens. This balance-sheet strength provides strategic optionality during execution and regulatory uncertainty.

Regulatory and clinical momentum

Expanded TRANSCEND 52-week data and an imminent PDUFA for acquired HO represent structural catalysts: potential label expansion could materially increase addressable market and support international launches. Positive long-term impact on commercial runway and franchise depth.

Negative Factors

Persistent cash burn

Sustained negative OCF and FCF reflect ongoing cash consumption from commercialization and development. Even with improving trends, persistent burn elevates refinancing and dilution risk if revenue growth or reimbursement lags, constraining long-term investment flexibility.

Regulatory-driven trial size/timeline risk

FDA insistence on a full 12-month randomized trial and larger safety database for bivamelagon materially increases development cost and extends timelines. This structural regulatory hurdle raises capital needs, delays potential launches and increases execution risk for next‑gen assets.

Planned higher operating spend

A sustained ~35% increase in non‑GAAP OpEx for 2026 driven by clinical supply, U.S. commercial launch and Japan buildout implies prolonged margin pressure. Elevated structural operating expenses will delay operating leverage and amplify funding needs absent faster revenue scaling.

Rhythm Pharmaceuticals Business Overview & Revenue Model

Company Description

Rhythm Pharmaceuticals, Inc., a commercial-stage biopharmaceutical company, focuses on the development and commercialization of therapeutics for the treatment of rare genetic diseases of obesity. The company's lead product candidate is IMCIVREE, a potent melanocortin-4 receptor for the treatment of pro-opiomelanocortin (POMC), proprotein convertase subtilisin/kexin type 1, leptin receptor (LEPR) deficiency obesity, and Bardet-Biedl and Alström syndrome. It is also developing setmelanotide, which is in Phase II clinical trials for treating POMC or LEPR heterozygous deficiency obesities, steroid receptor coactivator 1 deficiency obesity, SH2B1 deficiency obesity, MC4 receptor deficiency obesity, Smith-Magenis syndrome obesity, POMC epigenetic disorders, and other MC4R disorders. Rhythm Pharmaceuticals, Inc. has a collaborative research agreement with the Clinical Registry Investigating Bardet-Biedl Syndrome. The company was formerly known as Rhythm Metabolic, Inc. and changed its name to Rhythm Pharmaceuticals, Inc. in October 2015. Rhythm Pharmaceuticals, Inc. was founded in 2008 and is headquartered in Boston, Massachusetts.

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

Strong revenue scaling and very high gross margins (~88–91%) plus low leverage (debt-to-equity ~0.03) are positives, but the company still posts large net losses (2025 net loss -$201.9M) and persistent negative operating/free cash flow (2025 OCF -$115.7M; FCF -$116.6M), keeping overall financial strength moderate.

Income Statement

Revenue has scaled meaningfully over the period (from near-zero in 2020 to $189.8M in 2025), with a strong 2025 growth rate of 8.85% and consistently very high gross margins (~88–91%), indicating attractive unit economics. However, profitability remains weak: the company continues to post large operating losses and net losses (2025 net loss of -$201.9M) and net margins are still deeply negative, despite some improvement versus 2024. Overall, the income statement shows strong top-line traction but an unfinished path to operating leverage.

Balance Sheet

The balance sheet is conservatively levered, with very low debt relative to equity (2025 debt-to-equity ~0.03), which reduces financial risk and provides flexibility. That said, equity has declined from 2022 to 2025 (consistent with ongoing losses), and returns on equity are sharply negative across years, reflecting value dilution risk if losses persist. Overall, low leverage is a key strength, but continued losses are pressuring the capital base.

Cash Flow

Cash generation remains a primary weakness: operating cash flow and free cash flow are consistently negative (2025 operating cash flow -$115.7M; free cash flow -$116.6M), signaling ongoing cash burn. While free cash flow burn improved versus earlier years (e.g., better than 2022) and 2025 free cash flow growth is positive, the business still requires funding to sustain operations until profitability improves. Overall, cash flow trends are moving in the right direction but remain materially negative.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	189.76M	130.13M	77.43M	23.64M	3.15M
Gross Profit	170.26M	116.76M	68.13M	21.50M	2.56M
EBITDA	-174.12M	-238.09M	-168.46M	-174.25M	-68.45M
Net Income	-196.54M	-260.60M	-184.68M	-181.12M	-69.61M
Balance Sheet
Total Assets	481.19M	392.27M	332.75M	382.48M	329.52M
Cash, Cash Equivalents and Short-Term Investments	388.95M	320.56M	275.85M	333.29M	294.86M
Total Debt	246.47M	3.94M	1.26M	1.94M	2.55M
Total Liabilities	342.13M	227.72M	162.99M	118.22M	45.37M
Stockholders Equity	139.07M	164.55M	169.76M	264.26M	284.15M
Cash Flow
Free Cash Flow	-116.63M	-113.88M	-136.20M	-177.71M	-151.44M
Operating Cash Flow	-115.67M	-113.88M	-136.16M	-173.43M	-146.00M
Investing Cash Flow	-137.15M	-48.17M	-5.67M	28.03M	-62.16M
Financing Cash Flow	217.96M	191.24M	74.37M	213.83M	166.48M

Rhythm Pharmaceuticals Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 90.02
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RYTM, the sentiment is Negative. The current price of 90.02 is below the 20-day moving average (MA) of 96.04, below the 50-day MA of 101.29, and below the 200-day MA of 95.25, indicating a bearish trend. The MACD of -3.14 indicates Positive momentum. The RSI at 37.59 is Neutral, neither overbought nor oversold. The STOCH value of 33.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RYTM.

Rhythm Pharmaceuticals Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TGTX	61 Neutral	$4.48B	9.62	101.12%	―	100.88%	―
RNA	54 Neutral	―	-14.51	-32.44%	―	106.27%	-43.90%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
RYTM	50 Neutral	$6.15B	―	-179.05%	―	54.92%	28.47%
CYTK	50 Neutral	$7.84B	-9.72	172.91%	―	2609.26%	-17.08%
LEGN	50 Neutral	$3.75B	―	-29.22%	―	74.91%	31.54%
ABVX	44 Neutral	$8.81B	―	5077.65%	―	―	18.47%

Rhythm Pharmaceuticals Corporate Events

Rhythm Highlights Positive Phase 3 Data in Hypothalamic Obesity

On March 1, 2026, Rhythm Pharmaceuticals reported additional 52-week data from its global Phase 3 TRANSCEND trial of setmelanotide in acquired hypothalamic obesity, expanding the pivotal dataset to 142 patients, including 12 from Japan and 10 supplemental patients. The results showed an 18.8% placebo-adjusted BMI reduction, with patients on setmelanotide achieving a mean 16.4% BMI decrease versus a 2.4% BMI increase on placebo, and in patients aged 12 and older the drug also delivered greater reductions in hunger scores than placebo.

These findings strengthen the clinical profile of setmelanotide as Rhythm seeks an expanded indication, with a supplemental New Drug Application under U.S. FDA review and a PDUFA goal date of March 20, 2026, and parallel regulatory reviews ongoing in Europe and planned in Japan. If approvals follow, the data could position Rhythm as the first company with an approved therapy specifically for acquired hypothalamic obesity, potentially broadening its commercial footprint across an estimated 25,000 to 28,000 patients in the U.S., Europe and Japan and reinforcing its standing in the rare obesity segment.

The most recent analyst rating on (RYTM) stock is a Hold with a $104.00 price target. To see the full list of analyst forecasts on Rhythm Pharmaceuticals stock, see the RYTM Stock Forecast page.

Rhythm Pharmaceuticals Reports Strong Preliminary 2025 IMCIVREE Revenue

On January 9, 2026, Rhythm Pharmaceuticals reported preliminary, unaudited net product revenues from global sales of IMCIVREE of about $57 million for the fourth quarter of 2025, up 11% sequentially from the third quarter, and approximately $194 million for full-year 2025, a roughly 50% increase over 2024, with U.S. sales accounting for about two-thirds of the total; the company plans to release final fourth-quarter and full-year results in late February 2026. Rhythm also outlined a packed 2026 clinical and regulatory agenda centered on expanding setmelanotide into acquired and congenital hypothalamic obesity and genetically caused MC4R pathway diseases, advancing programs in Prader-Willi syndrome, and progressing its oral MC4R agonist bivamelagon and next-generation candidate RM-718, underscoring its bid to deepen its rare obesity franchise and sustain growth, although all financial figures remain preliminary and unaudited.

The most recent analyst rating on (RYTM) stock is a Buy with a $129.00 price target. To see the full list of analyst forecasts on Rhythm Pharmaceuticals stock, see the RYTM Stock Forecast page.

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.

The most recent analyst rating on (RYTM) stock is a Buy with a $140.00 price target. To see the full list of analyst forecasts on Rhythm Pharmaceuticals stock, see the RYTM Stock Forecast page.

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.

The most recent analyst rating on (RYTM) stock is a Buy with a $136.00 price target. To see the full list of analyst forecasts on Rhythm Pharmaceuticals stock, see the RYTM Stock Forecast page.