Rhythm Pharmaceuticals (RYTM) AI Stock Analysis

• Market Cap: $4.06B
• Dividend Yield: N/A
• Average Volume (3M): 740.14K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.97
• Revenue Growth: 48.88%
• EPS Growth: 39.30%
• Country: US
• Employees: 283
• Sector: Healthcare
• Sector Strength: 43
• Industry: Biotechnology
• EPS (TTM): -0.81
• Shares Outstanding: 63,621,470
• 10 Day Avg. Volume: 702,090
• 30 Day Avg. Volume: 740,145
• PEG Ratio: 7.90
• Price to Book (P/B): 20.51
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -30.42
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $82.08
• Price Target Upside: 32.37% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 12

• Rating: 52 Neutral
• Price Target: $57.00 ▼( -8.08% Downside)

Rhythm Pharmaceuticals shows strong revenue growth and promising clinical trial results, but is weighed down by ongoing financial losses and cash flow challenges. The technical analysis offers no clear trend, and the valuation remains difficult due to the lack of profitability. Positive sentiment from the earnings call and strategic corporate events provide some optimism, but financial stability remains a significant concern.

Positive Factors

Clinical Trial Success

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

Market Potential

Substantial market opportunity within reach, with Rhythm estimating thousands of potential patients across the U.S., Japan, and the E.U.

Regulatory Progress

The data are a clear win for setmelanotide with RYTM planning regulatory submissions in both the U.S. and EU.

Negative Factors

Market Competition

KOL's commentary is consistent with the view that IMCIVREE will see significant utilization in HO, but she also noted it has a 50-50 shot in Prader-Willi syndrome.

Safety Profile Concerns

The lack of hyperpigmentation for RM-718 and bivamelagon would be a meaningful differentiator.

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 flagship product, IMCIVREE. The company earns money by selling this drug to healthcare providers, hospitals, and specialty pharmacies. The pricing of IMCIVREE reflects its status as a treatment for rare genetic disorders, which often allows for premium pricing due to the lack of alternative therapies. Rhythm also engages in strategic partnerships and collaborations that may provide additional revenue streams through research funding, milestone payments, and royalties. Furthermore, the company invests in expanding the indications for IMCIVREE, which could broaden its market and increase sales.

Rhythm Pharmaceuticals Financial Statement Overview

Summary

Rhythm Pharmaceuticals is experiencing robust revenue growth, which is a positive sign for a biotechnology firm. However, the company is still struggling to achieve profitability and positive cash flow. While the debt levels are low, the negative equity returns and persistent net losses highlight ongoing financial challenges. Continued focus on cost management and achieving cash flow positivity will be crucial for long-term sustainability.

Income Statement

Rhythm Pharmaceuticals has shown significant revenue growth over the years, with an impressive increase from $3.15 million in 2021 to $130.13 million in 2024. However, profitability remains a concern as the company continues to report negative EBIT and net income, resulting in negative profit margins. The gross profit margin is relatively high at 89.71% for 2024, indicating efficient production, but the net profit margin is deeply negative due to substantial operating expenses.

Balance Sheet

The company's balance sheet reveals a low debt-to-equity ratio of 0.18 in 2024, indicating a conservative leverage strategy. However, the return on equity is negative due to consistent net losses, which is a major concern. The equity ratio has declined over time, reflecting increasing liabilities relative to assets, which might pose risks if the trend continues.

Cash Flow

Rhythm Pharmaceuticals has a negative operating cash flow of -$113.88 million in 2024, which is an improvement from previous years but still a concern. The free cash flow is also negative, suggesting that the company is not generating enough cash from its operations to cover its capital expenditures. The operating cash flow to net income ratio is positive, indicating that cash losses are smaller than accounting losses, partially due to non-cash expenses.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
130.13M	77.43M	23.64M	3.15M	0.00
	Gross Profit
116.76M	68.13M	21.50M	2.56M	-690.00K
	EBIT
-265.50M	-184.36M	-179.16M	-170.06M	-136.57M
	EBITDA
-238.09M	-168.46M	-174.51M	-68.45M	-135.88M
	Net Income Common Stockholders
-260.60M	-184.68M	-183.08M	-68.01M	-130.73M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
320.56M	275.85M	333.29M	294.86M	172.79M
	Total Assets
392.27M	332.75M	382.48M	329.52M	187.07M
	Total Debt
3.94M	1.26M	1.94M	2.55M	3.09M
	Net Debt
-85.20M	-58.82M	-125.73M	-56.70M	-97.77M
	Total Liabilities
227.72M	162.99M	118.22M	45.37M	20.55M
	Stockholders Equity
21.73M	169.76M	264.26M	284.15M	166.53M
Cash Flow		Free Cash Flow
-113.88M	-136.20M	-177.71M	-151.44M	-122.19M
	Operating Cash Flow
-113.88M	-136.16M	-173.43M	-146.00M	-121.98M
	Investing Cash Flow
-48.17M	-5.67M	28.03M	-62.16M	158.53M
	Financing Cash Flow
191.24M	74.37M	213.83M	166.48M	2.01M

Rhythm Pharmaceuticals Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 62.01
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 Positive. The current price of 62.01 is above the 20-day moving average (MA) of 61.95, above the 50-day MA of 58.11, and above the 200-day MA of 54.82, indicating a bullish trend. The MACD of 0.66 indicates Positive momentum. The RSI at 53.66 is Neutral, neither overbought nor oversold. The STOCH value of 78.17 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
AKRO	60 Neutral	$3.79B	―	-27.92%	―	―	-31.37%
SWTX	54 Neutral	$3.49B	―	-51.57%	―	730.42%	31.63%
Sector *	53 Neutral	$5.14B	3.06	-43.57%	2.81%	16.81%	-0.12%
RYTM	52 Neutral	$4.06B	―	-418.97%	―	48.88%	39.30%
RNA	52 Neutral	$3.71B	―	-34.19%	―	-17.87%	-1.89%
CRSP	50 Neutral	$3.24B	―	-19.71%	―	-86.13%	-67.29%
PTGX	48 Neutral	$2.85B	60.35	8.99%	―	-34.02%	-65.83%

Rhythm Pharmaceuticals Corporate Events

Rhythm Pharmaceuticals Announces Positive Phase 3 Trial Results

On April 7, 2025, Rhythm Pharmaceuticals announced positive topline results from its Phase 3 TRANSCEND clinical trial evaluating setmelanotide for acquired hypothalamic obesity. The trial met its primary endpoint, showing a significant reduction in BMI in both adult and pediatric patients compared to placebo. These results are seen as a potential milestone for the company, with plans to submit regulatory applications in the U.S. and EU by the third quarter of 2025. The trial’s success could position setmelanotide as the first approved therapy for this condition, impacting the company’s market and stakeholders positively.

Rhythm Pharmaceuticals Reacquires Setmelanotide Rights in Asia

On March 14, 2025, Rhythm Pharmaceuticals announced the termination of its licensing and share purchase agreements with RareStone Group Ltd., reacquiring the rights to IMCIVREE® (setmelanotide) in China, Hong Kong, and Macau. This strategic move allows Rhythm to own the global franchise for setmelanotide, aligning with its strategy to develop and commercialize treatments for rare neuroendocrine diseases worldwide. The termination agreement includes a repayment of $6.3 million to RareStone and the return of acquired shares without additional consideration, releasing all parties from any claims related to the previous agreements.