Rhythm Pharmaceuticals (RYTM) AI Stock Analysis

• Market Cap: $5.86B
• Dividend Yield: N/A
• Average Volume (3M): 786.03K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.55
• 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: 851,155
• 30 Day Avg. Volume: 786,031
• 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: 31.84
• Enterprise Value/Gross Profit: 35.49
• Enterprise Value/Ebitda: -34.70
• 1Y Price Target: $133.08
• Price Target Upside: 55.00% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 13
• EPS Forecast (FY): -3.1
• Revenue Forecast (FY): $286.71M

• Rating: 52 Neutral
• Price Target: $91.00 ▲(5.99% Upside)
• Action: Reiterated Date: 03/17/26
• Date: Action: Reiterated 03/17/26

The score is driven primarily by improving commercial traction and strong gross margins alongside a low-debt balance sheet, but it is held back by ongoing cash burn and losses. Technicals remain weak with the stock below key moving averages and negative momentum, while near-term outlook is mixed given higher 2026 spending guidance and mixed Phase 3 expansion data despite supportive AHO regulatory/clinical catalysts.

Positive Factors

Revenue Growth / Commercial Traction

Rhythm has moved from near-zero sales to meaningful recurring product revenue driven by IMCIVREE, with FY2025 ~+50% growth. Durable revenue scaling and patient-stay-on-therapy dynamics support expanding addressable revenue as genetic testing and specialty prescribing deepen over time.

High Gross Margins / Unit Economics

Very high gross margins and low COGS reflect favorable unit economics for a chronic specialty therapy. This structural margin advantage supports profitability leverage as volume scales and absorption of fixed costs improves, underpinning long-term cash generation potential per patient.

Conservative Leverage / Cash Runway

A low-debt balance sheet and substantial cash balance provide flexibility to fund commercial expansion and required trials. The conservative capital structure reduces near-term solvency risk and allows Rhythm to invest in launches and next-gen programs without immediate refinancing pressure.

Negative Factors

Persistent Cash Burn

Operating and free cash flows remain materially negative, indicating ongoing financing needs despite improving trends. Sustained cash burn forces reliance on capital markets or dilution if spending continues at current levels, constraining long-term financial flexibility unless profitability trends accelerate.

Phase 3 EMANATE Missed Primaries

Topline Phase 3 misses limit durable label expansion and illustrate development risk in heterogeneous genetic cohorts. The outcome necessitates more selective patient identification or additional trials, increasing time and cost to broaden indications and potentially capping near-term market opportunity outside core approvals.

Rising Planned Operating Spend

Management's planned ~35% OpEx increase for 2026—driven by formulation, clinical supply and commercial build—raises structural cash requirements. Higher fixed operating run-rate amplifies funding risk and could delay breakeven absent faster margin conversion or materially higher sales growth.

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 primarily makes money by selling IMCIVREE (setmelanotide). Revenue is generated from product sales to specialty distributors/wholesalers and other customers in the markets where IMCIVREE is commercialized; the net amount recognized is affected by typical pharmaceutical deductions such as rebates, discounts, chargebacks, returns, and patient assistance/co-pay programs. The company’s commercial model depends on identifying eligible patients through genetic testing and specialty-physician prescribing, after which it supplies a chronic therapy that can produce recurring revenue over time as patients remain on treatment. If applicable in certain territories, Rhythm may also earn revenue through collaboration or licensing arrangements (e.g., milestone payments, cost-sharing, or royalties), but specific partnership revenue details are null.

Rhythm Pharmaceuticals Financial Statement Overview

Summary

Strong revenue scaling and very high gross margins support the business model, and leverage is low (very low debt-to-equity), reducing balance-sheet risk. Offsetting this, the company remains deeply unprofitable with sizable net losses and persistent negative operating/free cash flow, indicating ongoing funding needs despite improving burn trends.

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: 85.86
• 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 85.86 is below the 20-day moving average (MA) of 93.35, below the 50-day MA of 99.48, and below the 200-day MA of 95.94, indicating a bearish trend. The MACD of -3.58 indicates Positive momentum. The RSI at 35.73 is Neutral, neither overbought nor oversold. The STOCH value of 46.50 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	$4.80B	9.62	101.12%	―	100.88%	―
RNA	54 Neutral	―	-10.47	-32.44%	―	106.27%	-43.90%
RYTM	52 Neutral	$5.86B	-35.39	-179.05%	―	54.92%	28.47%
LEGN	52 Neutral	$3.37B	-6.73	-29.22%	―	74.91%	31.54%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
CYTK	50 Neutral	$7.66B	-9.72	172.91%	―	2609.26%	-17.08%
ABVX	44 Neutral	$9.76B	-1.02	5077.65%	―	―	18.47%

Rhythm Pharmaceuticals Corporate Events

Rhythm Pharmaceuticals Reports Mixed Phase 3 EMANATE Results

On March 16, 2026, Rhythm Pharmaceuticals reported topline data from EMANATE, a global Phase 3 trial of setmelanotide in four rare, genetically driven obesity subgroups, showing that none of the substudies met the pre-specified primary endpoint of BMI reduction at 52 weeks versus placebo. However, post hoc analyses indicated statistically significant and clinically meaningful BMI reductions in patients with heterozygous POMC/PCSK1 and SRC1 (NCOA1) variants who completed the 52-week regimen, while safety findings were consistent with prior experience and revealed no new signals.

The mixed outcome underscores both the challenges of expanding setmelanotide beyond currently approved monogenic indications and the potential to refine patient selection by focusing on true loss-of-function variants in specific genes. Rhythm said it will mine the EMANATE dataset to guide development of next-generation MC4R agonists bivamelagon and RM-718 and will continue exploring MC4R agonism across additional gene families flagged in earlier studies, a strategy that could protect its leadership in rare genetic obesity despite the Phase 3 miss.

The most recent analyst rating on (RYTM) stock is a Buy with a $143.00 price target. To see the full list of analyst forecasts on Rhythm Pharmaceuticals stock, see the RYTM Stock Forecast page.

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.