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Rhythm Pharmaceuticals
(NASDAQ:RYTM)
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Rating:54Neutral
Price Target:
$110.00
▲(24.03% Upside)
Action:Reiterated
Date:06/26/26
The score is primarily weighed down by weak financial quality (ongoing losses, negative free cash flow, and higher leverage), despite strong top-line scaling and gross margins. Technicals are a tailwind with clear upward momentum, but overbought signals add near-term risk. The latest earnings call supports a constructive outlook on commercial and regulatory execution with adequate liquidity, while valuation remains challenged due to unprofitability.
Positive Factors
Revenue Scale & Unit Economics
Revenue grew materially from 2022 to TTM while gross margins remained very high, demonstrating durable unit economics. High gross margin across periods implies manufacturing and pricing leverage that can support reinvestment and margin expansion as commercialization scales sustainably.
Negative Factors
Negative Cash Generation
Persistent negative operating and free cash flow (TTM) reflects ongoing cash burn that historically ranges near -$114M to -$173M annually. Without sustained margin expansion or material revenue growth beyond current trends, the company will likely need external capital, raising dilution and financing risk.
Read all positive and negative factors
Positive Factors
Negative Factors
Revenue Scale & Unit Economics
Revenue grew materially from 2022 to TTM while gross margins remained very high, demonstrating durable unit economics. High gross margin across periods implies manufacturing and pricing leverage that can support reinvestment and margin expansion as commercialization scales sustainably.
Read all positive factors
Rhythm Pharmaceuticals Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks revenue into sources such as product sales, partnerships, milestones, and royalties to show whether the company relies on a single drug, partner agreements, or recurring product income. A business skewed toward one-time milestones or a single product carries higher execution and commercialization risk, while diversified or recurring revenue points to more sustainable cash flow and clearer paths to profitability.
Breaks revenue into sources such as product sales, partnerships, milestones, and royalties to show whether the company relies on a single drug, partner agreements, or recurring product income. A business skewed toward one-time milestones or a single product carries higher execution and commercialization risk, while diversified or recurring revenue points to more sustainable cash flow and clearer paths to profitability.
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The Fly
The FlyRhythm Pharmaceuticals (RYTM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.53B
Dividend YieldN/A
Average Volume (3M)753.96K
Price to Earnings (P/E)―
Beta (1Y)1.55
Revenue Growth58.67%
EPS Growth-11.45%
CountryUS
Employees283
SectorHealthcare
Sector Strength45
IndustryBiotechnology
Share Statistics
EPS (TTM)-3.13
Shares Outstanding68,593,575
10 Day Avg. Volume980,194
30 Day Avg. Volume753,959
Financial Highlights & Ratios
PEG Ratio1.21
Price to Book (P/B)50.02
Price to Sales (P/S)36.66
P/FCF Ratio-59.64
Enterprise Value/Market Cap0.89
Enterprise Value/Revenue31.03
Enterprise Value/Gross Profit34.70
Enterprise Value/Ebitda-37.28
Forecast
1Y Price Target
$137.75Price Target Upside55.32% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering12
EPS Forecast (FY)-3.15
Revenue Forecast (FY)$298.08M
Rhythm Pharmaceuticals Business Overview & Revenue Model
Company Description
Rhythm Pharmaceuticals, Inc. is a biopharmaceutical company with commercial products, dedicated to the discovery, development, and market launch of therapies addressing rare genetic conditions that cause obesity. Its leading pharmaceutical, IMCIVR...
How the Company Makes Money
Rhythm Pharmaceuticals primarily makes money by selling its prescription drug IMCIVREE (setmelanotide). Revenue is generated from product sales to customers such as specialty pharmacies, distributors, and/or healthcare providers (depending on mark...
Rhythm Pharmaceuticals Earnings Call Summary
Earnings Call Date:May 05, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 04, 2026
Earnings Call Sentiment Positive
The call presented a largely positive commercial and regulatory picture: sequential revenue growth (5%), strong international acceleration (27% QoQ outside U.S.), an encouraging early HO launch (150+ start forms, broad prescriber base), EU marketing authorization and a progressing Japan filing, supported by a solid cash runway (~$341M). Offsetting these positives are meaningful increases in operating expenses (notably SG&A up ~62.7% YoY), ongoing GAAP losses (Q1 EPS -$0.83) and near-term variability and uncertainty tied to payer policy timing, inventory effects and the pace of clinical-to-commercial conversions. Overall, the operational momentum and regulatory wins outweigh the financial and execution risks highlighted for the near term.Positive Updates
Quarterly Revenue Growth
Global net revenues of $60.1M in Q1 2026, representing 5% sequential growth from $57M in Q4 2025. 61% of Q1 revenue was generated in the United States.
Negative Updates
GAAP Loss and Cash Burn
GAAP net loss per share of $0.83 in Q1 2026 and cash used in operations of approximately $44.2M during the quarter.
Read all updates
Q1-2026 Updates
Positive
Negative
Quarterly Revenue Growth
Global net revenues of $60.1M in Q1 2026, representing 5% sequential growth from $57M in Q4 2025. 61% of Q1 revenue was generated in the United States.
Read all positive updates
Company Guidance
Rhythm reiterated full‑year 2026 non‑GAAP operating expense guidance of $385–415 million (comprised of non‑GAAP R&D ~$197–213M and non‑GAAP SG&A ~$188–202M) and said non‑GAAP operating expenses are expected to rise through 2026 due to CMC and clinical supply investments; Q1 results included $60.1M global net revenue (+5% sequential from $57M) with 61% U.S. contribution and non‑U.S. revenue $23.2M (+27% Q/Q from $18.3M), gross‑to‑net (U.S.) 84%, COGS 11.9% of product revenue, R&D $41.7M (vs $37.0M a year ago), SG&A $63.6M (vs $39.1M a year ago; +$6.1M QoQ), total operating expenses ≈$105.3M (including $23.1M stock‑based comp), non‑GAAP op exp Q1 $82.2M, GAAP loss per share $0.83 (weighted avg shares 68M), cash used in operations ~$44.2M, and cash, cash equivalents and short‑term investments ~$341M (expected runway ≥24 months); commercial/timing guidance included an 8% QoQ increase in patients on reimbursed therapy, >150 HO start forms in six weeks (≈110 unique prescribers; ~80% new prescribers; ~40 from trial conversions), expectation that HO‑specific payer policies will take ~3–9 months, G‑BA process ~6–9 months with EU launches planned in 2027, anticipated Japan approval/launch by end‑2026, and a target to begin a Phase III trial of bivamelagon in HO by end‑2026 with clinical data updates (Dr. Miller PWS 6‑month data at Endo in June, 718 midyear, Part C HO on the Q2 call).Rhythm Pharmaceuticals Financial Statement Overview
Summary
Income Statement
44
Neutral
Balance Sheet
38
Negative
Cash Flow
32
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 217.16M | 189.76M | 130.13M | 77.43M | 23.64M | 3.15M |
| Gross Profit | 194.16M | 170.26M | 116.76M | 68.13M | 21.50M | 2.56M |
| EBITDA | -180.75M | -174.12M | -238.09M | -168.46M | -174.25M | -68.45M |
| Net Income | -202.68M | -196.54M | -260.60M | -184.68M | -181.12M | -69.61M |
Balance Sheet | ||||||
| Total Assets | 442.32M | 481.19M | 392.27M | 332.75M | 382.48M | 329.52M |
| Cash, Cash Equivalents and Short-Term Investments | 340.63M | 388.95M | 320.56M | 275.85M | 333.29M | 294.86M |
| Total Debt | 227.02M | 246.47M | 3.94M | 1.26M | 1.94M | 2.55M |
| Total Liabilities | 319.41M | 342.13M | 227.72M | 162.99M | 118.22M | 45.37M |
| Stockholders Equity | 122.91M | 139.07M | 164.55M | 169.76M | 264.26M | 284.15M |
Cash Flow | ||||||
| Free Cash Flow | -120.46M | -116.63M | -113.88M | -136.20M | -177.71M | -151.44M |
| Operating Cash Flow | -119.51M | -115.67M | -113.88M | -136.16M | -173.43M | -146.00M |
| Investing Cash Flow | -104.91M | -137.15M | -48.17M | -5.67M | 28.03M | -62.16M |
| Financing Cash Flow | 180.06M | 217.96M | 191.24M | 74.37M | 213.83M | 166.48M |
Rhythm Pharmaceuticals Technical Analysis
Positive
88.69
Price Trends
90.37
Positive
91.30
Positive
97.88
Positive
Market Momentum
4.98
Negative
77.25
Negative
87.99
Negative
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 88.69 is below the 20-day moving average (MA) of 93.00, below the 50-day MA of 90.37, and below the 200-day MA of 97.88, indicating a bullish trend. The MACD of 4.98 indicates Negative momentum. The RSI at 77.25 is Negative, neither overbought nor oversold. The STOCH value of 87.99 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RYTM.
Rhythm Pharmaceuticals Risk Analysis
Rhythm Pharmaceuticals disclosed 70 risk factors in its most recent earnings report. Rhythm Pharmaceuticals reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Rhythm Pharmaceuticals Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $8.55B | 17.56 | 87.36% | ― | 81.26% | 1079.73% | |
54 Neutral | $7.53B | -35.09 | -203.25% | ― | 58.67% | -11.45% | |
53 Neutral | $5.33B | -21.10 | -24.91% | ― | 56.70% | -13.77% | |
52 Neutral | $10.23B | -12.03 | 139.66% | ― | 450.60% | -28.90% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
45 Neutral | $225.62M | -4.94 | -29.67% | ― | ― | ― | |
43 Neutral | $7.68B | -17.49 | -165.19% | ― | ― | ― |
* Healthcare Sector Average
RYTM
Rhythm Pharmaceuticals
109.84
46.65
73.82%
CYTK
Cytokinetics
82.19
49.15
148.76%
TGTX
TG Therapeutics
55.83
19.84
55.13%
LEGN
Legend Biotech
28.69
-6.80
-19.16%
RNA
Atrium Therapeutics, Inc.
13.19
-1.56
-10.58%
ABVX
Abivax SA Sponsored ADR
97.50
89.85
1174.51%
Rhythm Pharmaceuticals Corporate Events
Executive/Board ChangesShareholder Meetings
Rhythm Pharmaceuticals Stockholders Back Board, Governance Proposals
Positive
Jun 25, 2026
On June 24, 2026, Rhythm Pharmaceuticals, Inc. held its Annual Meeting of Stockholders, at which about 92% of the 69.7 million eligible votes, including common and Series A convertible preferred stock, were represented. Stockholders elected David ...
Business Operations and StrategyProduct-Related Announcements
Rhythm Showcases Positive Setmelanotide Data Across Obesity Trials
Positive
Jun 15, 2026
On June 13 and June 15, 2026, Rhythm Pharmaceuticals reported positive interim six-month data from an exploratory Phase 2 trial of setmelanotide in Prader-Willi syndrome and unveiled multiple new clinical and real-world data sets at ENDO 2026 in C...
Business Operations and StrategyProduct-Related AnnouncementsRegulatory Filings and Compliance
Rhythm Pharmaceuticals Gains EMA Backing for IMCIVREE Expansion
Positive
Mar 26, 2026
On March 26, 2026, Rhythm Pharmaceuticals reported that the EMA’s Committee for Medicinal Products for Human Use issued a positive opinion backing an expansion of IMCIVREE’s marketing authorization. The proposed label would cover treat...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.