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Rhythm Pharmaceuticals
(NASDAQ:RYTM)
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Rating:56Neutral
Price Target:
$109.00
▲(6.76% Upside)
Action:Reiterated
Date:08/05/26
The score is held back primarily by weak financial performance (large ongoing losses and negative cash flow) and limited valuation support (negative P/E and no dividend). These are partially offset by a positive earnings call highlighting accelerating commercial traction, improving launch/access metrics, and pipeline progress, plus a generally constructive longer-term price trend with neutral near-term momentum.
Positive Factors
High product margins & revenue growth
Sustained high gross margins (~89–91%) and multi-year revenue growth (TTM ~$240M) indicate strong product-level economics and pricing power for IMCIVREE. These durable unit economics support reinvestment in commercialization and R&D while enabling scalable margin expansion as volumes grow.
Negative Factors
Deep ongoing unprofitability
Despite strong top-line growth, operating and net margins remain deeply negative (TTM operating margin ~-77%, net margin ~-86%), meaning the business still requires substantial cash to cover operating losses. Persistent unprofitability raises financing risk and delays self-sustaining cash generation absent margin or volume inflection.
Read all positive and negative factors
Positive Factors
Negative Factors
High product margins & revenue growth
Sustained high gross margins (~89–91%) and multi-year revenue growth (TTM ~$240M) indicate strong product-level economics and pricing power for IMCIVREE. These durable unit economics support reinvestment in commercialization and R&D while enabling scalable margin expansion as volumes grow.
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
$7.77B
Dividend YieldN/A
Average Volume (3M)884.69K
Price to Earnings (P/E)―
Beta (1Y)1.56
Revenue Growth53.51%
EPS Growth-3.31%
CountryUS
Employees414
SectorHealthcare
Sector Strength45
IndustryBiotechnology
Share Statistics
EPS (TTM)-3.11
Shares Outstanding68,852,080
10 Day Avg. Volume531,086
30 Day Avg. Volume884,687
Financial Highlights & Ratios
PEG Ratio1.21
Price to Book (P/B)25.76
Price to Sales (P/S)36.66
P/FCF Ratio-59.64
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda>-0.01
Forecast
1Y Price Target
$142.47Price Target Upside39.54% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering15
EPS Forecast (FY)-3.01
Revenue Forecast (FY)$312.05M
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:Aug 04, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 10, 2026
Earnings Call Sentiment Positive
The call conveyed a largely positive commercial and scientific momentum: robust early U.S. launch metrics for IMCIVREE in acquired hypothalamic obesity, 19% sequential product sales growth, encouraging RM-718 early efficacy comparable to existing MC4R agonists, NEJM coverage, and planned international rollouts (Japan and Europe). Key challenges include a one‑time France revenue charge, higher SG&A and continued GAAP losses, some tolerability-related discontinuations in RM-718, and ongoing diagnosis/access constraints that could temper uptake timing. On balance, the growth and pipeline derisking signals materially outweigh the near-term financial and operational headwinds.Positive Updates
Strong U.S. IMCIVREE HO Launch Activity
Received >400 start forms from ~300 prescribers in the first 14 weeks after FDA approval (March 19), ~300 unique prescribers activated, ~20% of prescribers wrote >1 script; 65% of priority accounts activated and ~25% of prescriptions came from those accounts.
Negative Updates
International Revenue Headwind — France Charge
International revenue declined from $23.2M to $20.3M in Q2, primarily due to a $3.8M retrospective French contribution mechanism charge (of which $2.3M related to 2025), masking otherwise continued international patient growth.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong U.S. IMCIVREE HO Launch Activity
Received >400 start forms from ~300 prescribers in the first 14 weeks after FDA approval (March 19), ~300 unique prescribers activated, ~20% of prescribers wrote >1 script; 65% of priority accounts activated and ~25% of prescriptions came from those accounts.
Read all positive updates
Company Guidance
The company provided quarterly and full‑year financial and operational guidance and launch metrics: Q2 2026 net product sales were $71.3M (up 19% sequentially from $60.1M in Q1), with $51M (72%) from the U.S., GTN improving to 86%, and patients on reimbursed therapy growing >20% quarter‑over‑quarter; the U.S. HO launch delivered >400 start forms from ~300 prescribers in the first 14 weeks (66 converts from trial patients), ~300 unique prescribers total with 43% adult and 37% pediatric endocrinologists, ~20% of prescribers writing >1 script, 65% of 43 priority accounts activated (delivering ~25% of prescriptions), and payer policies covering ~25% of Medicaid and ~35% of commercial lives by end‑Q2. Q2 operating stats: COGS 12.5% of product revenue, R&D $43.4M (up $1.7M sequentially), SG&A $67.4M (up $3.8M sequentially), total operating expenses ~ $110.9M including $26.1M stock‑based comp, GAAP net loss per share $0.73, cash used in operations ~$9M, and cash/cash equivalents/short‑term investments of ~$331M (expected to fund operations for ≥24 months). Updated 2026 non‑GAAP operating expense guidance is $363M–$397M (R&D $175M–$195M, midpoint reduced by $20M vs. prior expectation; SG&A $188M–$202M unchanged). Clinical and commercial milestones/guidance included RM‑718 Phase II early HO data (11 enrolled, 8 on therapy, 7 at week 16 with mean BMI 40.1 and mean BMI reduction 11.6% at week 16), initiation of bivamelagon Phase III in RH by year‑end, PWS Part D enrollment completion by year‑end (goal 10–15 patients), Japan regulatory/launch target by end‑2026 (estimated 5,000–8,000 patients), and Europe country launches in 2027 (Germany H1 2027), with patent protection for 718 and biva extending past 2040.Rhythm Pharmaceuticals Financial Statement Overview
Summary
Income Statement
38
Negative
Balance Sheet
62
Positive
Cash Flow
41
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 239.92M | 189.76M | 130.13M | 77.43M | 23.64M | 3.15M |
| Gross Profit | 213.53M | 170.26M | 116.76M | 68.13M | 21.50M | 2.56M |
| EBITDA | -184.97M | -174.12M | -238.09M | -168.46M | -174.25M | -68.45M |
| Net Income | -205.35M | -196.54M | -260.60M | -184.68M | -181.12M | -69.61M |
Balance Sheet | ||||||
| Total Assets | 437.27M | 480.20M | 392.27M | 332.75M | 382.48M | 329.52M |
| Cash, Cash Equivalents and Short-Term Investments | 330.90M | 388.95M | 320.56M | 275.85M | 333.29M | 294.86M |
| Total Debt | 3.68M | 3.99M | 3.94M | 1.26M | 1.94M | 2.55M |
| Total Liabilities | 219.97M | 210.17M | 227.72M | 162.99M | 118.22M | 45.37M |
| Stockholders Equity | 217.30M | 270.03M | 164.55M | 169.76M | 264.26M | 284.15M |
Cash Flow | ||||||
| Free Cash Flow | -150.49M | -116.63M | -113.88M | -136.20M | -177.71M | -151.44M |
| Operating Cash Flow | -149.53M | -115.67M | -113.88M | -136.16M | -173.43M | -146.00M |
| Investing Cash Flow | -87.88M | -137.15M | -48.17M | -5.67M | 28.03M | -62.16M |
| Financing Cash Flow | 174.39M | 217.96M | 191.24M | 74.37M | 213.83M | 166.48M |
Rhythm Pharmaceuticals Technical Analysis
Positive
102.10
Price Trends
103.45
Positive
95.34
Positive
99.12
Positive
Market Momentum
2.79
Negative
64.28
Neutral
88.36
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 102.1 is below the 20-day moving average (MA) of 107.56, below the 50-day MA of 103.45, and above the 200-day MA of 99.12, indicating a bullish trend. The MACD of 2.79 indicates Negative momentum. The RSI at 64.28 is Neutral, neither overbought nor oversold. The STOCH value of 88.36 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 |
|---|---|---|---|---|---|---|---|
69 Neutral | $7.64B | 16.26 | 72.30% | ― | 76.08% | 634.54% | |
56 Neutral | $7.77B | -37.81 | -159.87% | ― | 53.51% | -3.31% | |
55 Neutral | $10.63B | -10.49 | 163.98% | ― | -21.07% | -41.03% | |
54 Neutral | $4.05B | -15.18 | -24.91% | ― | 59.59% | 71.96% | |
52 Neutral | $11.06B | -22.63 | -165.19% | ― | ― | ― | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
45 Neutral | $209.89M | -4.56 | -29.67% | ― | ― | ― |
* Healthcare Sector Average
RYTM
Rhythm Pharmaceuticals
117.60
19.74
20.17%
CYTK
Cytokinetics
75.64
38.76
105.10%
TGTX
TG Therapeutics
49.50
21.63
77.61%
LEGN
Legend Biotech
20.65
-16.28
-44.08%
RNA
Atrium Therapeutics, Inc.
12.17
-2.58
-17.49%
ABVX
Abivax SA Sponsored ADR
125.52
55.63
79.60%
Rhythm Pharmaceuticals Corporate Events
Business Operations and StrategyFinancial DisclosuresProduct-Related Announcements
Rhythm Pharmaceuticals Reports Promising Phase 2 Obesity Data
Positive
Aug 4, 2026
Rhythm Pharmaceuticals reported strong commercial and clinical momentum for the quarter ended June 30, 2026, highlighted by the U.S. launch of IMCIVREE for acquired hypothalamic obesity following FDA approval on March 19, 2026 and net product reve...
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...
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.