Rhythm Pharmaceuticals (RYTM) AI Stock Analysis

• Market Cap: $6.46B
• Dividend Yield: N/A
• Average Volume (3M): 668.69K
• Price to Earnings (P/E): ―
• Beta (1Y): 2.06
• Revenue Growth: 53.55%
• EPS Growth: 30.87%
• Country: US
• Employees: 283
• Sector: Healthcare
• Sector Strength: 48
• Industry: Biotechnology
• EPS (TTM): -0.75
• Shares Outstanding: 66,420,090
• 10 Day Avg. Volume: 559,837
• 30 Day Avg. Volume: 668,689
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.62
• Enterprise Value/Revenue: 25.55
• Enterprise Value/Gross Profit: 28.63
• Enterprise Value/Ebitda: -24.49
• 1Y Price Target: $109.40
• Price Target Upside: 5.94% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 15

• Rating: 55 Neutral
• Price Target: $104.00 ▲(0.71% Upside)

Rhythm Pharmaceuticals' stock score is primarily impacted by financial challenges, including negative profitability and cash flow issues. However, strong technical indicators and positive clinical trial results provide some optimism. The earnings call and corporate events highlight growth potential, but rising expenses and trial challenges remain concerns.

Positive Factors

Financial Performance

Financial results were encouraging, with Imcivree sales for 2Q being $48.5M, above consensus estimates.

Market Opportunity

Setmelanotide hits in the Phase 3 TRANSCEND trial for hypothalamic obesity, unlocking a multi billion-dollar opportunity and derisking the next-generation MC4R agonists.

Regulatory Advancements

The FDA accepted the sNDA filing for setmelanotide with Priority Review for conditions associated with acquired hypothalamic obesity.

Negative Factors

Clinical Challenges

The challenge will be demonstrating a clear signal against the noise of this complex condition, given the heterogeneity of Prader-Willi syndrome.

Operational Costs

RYTM delivered a topline beat for 2Q25, offset by increased OpEx due to clinical trial costs.

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 sale of its lead product, Imcivree. The company markets this therapy to healthcare providers and specialty pharmacies, leveraging its focused sales and marketing strategies aimed at reaching patients with rare genetic obesity disorders. Additionally, Rhythm may engage in collaboration agreements or partnerships with other pharmaceutical companies to enhance its research and development capabilities, which can provide upfront payments, milestone payments, and royalties on future sales. The company's revenue model is further supported by the potential expansion of its product pipeline and new indications for existing therapies, which can attract additional revenue streams.

Rhythm Pharmaceuticals Financial Statement Overview

Summary

Rhythm Pharmaceuticals shows revenue growth but faces significant challenges in profitability and cash flow management. The company's low leverage is positive, but negative equity and cash flow issues pose substantial risks.

Income Statement

Rhythm Pharmaceuticals shows a positive revenue growth trend with a 14.19% increase in the TTM period. However, the company is struggling with profitability, as indicated by negative net profit margins and EBIT margins. The gross profit margin remains high, suggesting efficient cost management, but the overall profitability is hindered by high operating expenses.

Balance Sheet

The company's balance sheet reflects a low debt-to-equity ratio, indicating minimal leverage, which is a positive sign of financial stability. However, the negative stockholders' equity in the TTM period and a negative return on equity highlight significant financial challenges and potential risks.

Cash Flow

Cash flow analysis reveals a negative free cash flow growth rate in the TTM period, indicating cash flow challenges. The operating cash flow to net income ratio is negative, suggesting inefficiencies in converting income into cash. The free cash flow to net income ratio is positive, but overall cash flow management remains a concern.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	156.29M	130.13M	77.43M	23.64M	3.15M	0.00
Gross Profit	139.48M	116.76M	68.13M	21.50M	2.56M	-690.00K
EBITDA	-163.01M	-238.09M	-168.46M	-174.51M	-68.45M	-135.88M
Net Income	-183.06M	-260.60M	-184.68M	-183.08M	-68.01M	-130.73M
Balance Sheet
Total Assets	372.73M	392.27M	332.75M	382.48M	329.52M	187.07M
Cash, Cash Equivalents and Short-Term Investments	291.03M	320.56M	275.85M	333.29M	294.86M	172.79M
Total Debt	4.19M	3.94M	1.26M	1.94M	2.55M	3.09M
Total Liabilities	239.15M	227.72M	162.99M	118.22M	45.37M	20.55M
Stockholders Equity	133.58M	164.55M	169.76M	264.26M	284.15M	166.53M
Cash Flow
Free Cash Flow	-67.72M	-113.88M	-136.20M	-177.71M	-151.44M	-122.19M
Operating Cash Flow	-107.72M	-113.88M	-136.16M	-173.43M	-146.00M	-121.98M
Investing Cash Flow	9.19M	-48.17M	-5.67M	28.03M	-62.16M	158.53M
Financing Cash Flow	72.43M	191.24M	74.37M	213.83M	166.48M	2.01M

Rhythm Pharmaceuticals Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 103.27
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: 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 103.27 is above the 20-day moving average (MA) of 93.22, above the 50-day MA of 81.92, and above the 200-day MA of 64.09, indicating a bullish trend. The MACD of 5.17 indicates Negative momentum. The RSI at 78.34 is Negative, neither overbought nor oversold. The STOCH value of 93.98 is Negative, 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
Sector *	65 Neutral	¥346.28B	11.35	-1.45%	2.36%	9.60%	-12.35%
RNA	63 Neutral	$5.66B	―	-37.76%	―	1.23%	-20.45%
SWTX	61 Neutral		―		―	730.42%	31.63%
AKRO	60 Neutral	$3.81B	―	-31.14%	―	―	-11.39%
PTGX	60 Neutral	$3.49B	80.66	8.61%	―	-34.45%	-69.75%
RYTM	55 Neutral	$6.46B	―	-1334.54%	―	53.55%	30.87%
CRSP	50 Neutral	$4.93B	―	-25.34%	―	-81.18%	-69.19%

Rhythm Pharmaceuticals Corporate Events

Rhythm Pharmaceuticals Announces Stock Offering Agreement

On July 9, 2025, Rhythm Pharmaceuticals entered into an underwriting agreement with Morgan Stanley & Co. LLC and BofA Securities, Inc. for the sale of 2,058,824 shares of its common stock at $85.00 per share, with an option for underwriters to purchase an additional 308,823 shares. The offering is expected to close on July 11, 2025, generating approximately $188.7 million in net proceeds, which the company plans to use for clinical development, commercialization activities for IMCIVREE, and general corporate purposes. This financial move is anticipated to support the company’s operations for at least the next 24 months.

Rhythm Pharmaceuticals Reports Positive Phase 2 Trial Results

On July 9, 2025, Rhythm Pharmaceuticals announced positive topline results from its Phase 2 trial of bivamelagon, an investigational oral MC4R agonist, in patients with acquired hypothalamic obesity. The trial demonstrated statistically significant and clinically meaningful reductions in BMI over 14 weeks, with bivamelagon achieving reductions comparable to those seen with setmelanotide in similar patient populations. The trial also showed meaningful reductions in hunger scores and consistent safety and tolerability results. Rhythm plans to engage with regulatory authorities to advance bivamelagon to a Phase 3 trial, aiming to establish it as a treatment for acquired hypothalamic obesity.

Rhythm Pharmaceuticals Updates Exculpation Provision in Charter

On June 24, 2025, Rhythm Pharmaceuticals held its Annual Meeting of Stockholders, where stockholders approved an amendment to the company’s Certificate of Incorporation. This amendment updates the exculpation provision for certain officers, aligning with recent changes in Delaware’s General Corporation Law. The amendment was filed and became effective on June 25, 2025. Additionally, Jennifer Good and Edward T. Mathers were elected as Class II Directors, and other proposals, including the ratification of Ernst & Young LLP as the company’s accounting firm, were approved.