Rhythm Pharmaceuticals (NASDAQ:RYTM) Stock Price Target Cut by Needham & Company LLC

Key Points

• Needham cut its price target on Rhythm Pharmaceuticals from $130 to $114 but maintained a Buy rating; the new target implies about 30% upside from the share price cited in the report.
• Shares fell 6.2% to $87.62 on Tuesday. Analyst sentiment remained broadly positive, with MarketBeat reporting an average “Moderate Buy” rating and an average price target of $141.61.
• Rhythm’s latest quarter beat estimates: it reported a loss of $0.61 per share and revenue of $92.1 million, up 79.6% year over year. The company remains unprofitable, with analysts expecting a full-year loss.

Rhythm Pharmaceuticals (NASDAQ:RYTM - Get Free Report) had its price objective dropped by investment analysts at Needham & Company LLC from $130.00 to $114.00 in a research report issued to clients and investors on Tuesday, Benzinga reports. The brokerage currently has a "buy" rating on the stock. Needham & Company LLC's price target suggests a potential upside of 30.11% from the company's current price.

Other equities research analysts have also issued reports about the stock. Leerink Partners began coverage on shares of Rhythm Pharmaceuticals in a report on Monday, September 14th. They issued an "outperform" rating and a $133.00 price objective for the company. Wolfe Research started coverage on shares of Rhythm Pharmaceuticals in a report on Thursday, September 17th. They set an "outperform" rating on the stock. Royal Bank Of Canada lifted their target price on shares of Rhythm Pharmaceuticals from $155.00 to $159.00 and gave the stock an "outperform" rating in a research report on Thursday, October 8th. William Blair assumed coverage on shares of Rhythm Pharmaceuticals in a research note on Friday, October 16th. They issued an "outperform" rating for the company. Finally, Citigroup restated a "market outperform" rating on shares of Rhythm Pharmaceuticals in a research report on Wednesday, August 5th. Eighteen analysts have rated the stock with a Buy rating, three have issued a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat.com, the company currently has an average rating of "Moderate Buy" and an average target price of $141.61.

Rhythm Pharmaceuticals Stock Down 6.2%

Shares of Rhythm Pharmaceuticals stock traded down $5.82 during trading on Tuesday, hitting $87.62. 5,132,320 shares of the stock traded hands, compared to its average volume of 773,576. The stock has a market cap of $6.00 billion, a price-to-earnings ratio of -28.09 and a beta of 2.01. The firm's fifty day moving average is $96.85 and its 200-day moving average is $97.29. Rhythm Pharmaceuticals has a 52 week low of $74.50 and a 52 week high of $122.20.

Rhythm Pharmaceuticals (NASDAQ:RYTM - Get Free Report) last released its earnings results on Tuesday, November 3rd. The company reported ($0.61) earnings per share for the quarter, topping analysts' consensus estimates of ($0.71) by $0.10. The company had revenue of $92.13 million during the quarter, compared to the consensus estimate of $85.56 million. Rhythm Pharmaceuticals had a negative return on equity of 159.87% and a negative net margin of 85.59%. Rhythm Pharmaceuticals's quarterly revenue was up 79.6% compared to the same quarter last year. During the same quarter in the previous year, the company posted ($0.82) EPS. On average, analysts forecast that Rhythm Pharmaceuticals will post -2.77 earnings per share for the current fiscal year.

Insider Activity

In other news, insider Joseph Shulman sold 5,079 shares of the firm's stock in a transaction that occurred on Thursday, August 13th. The shares were sold at an average price of $119.75, for a total value of $608,210.25. Following the transaction, the insider owned 15,915 shares in the company, valued at approximately $1,905,821.25. This trade represents a 24.19% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Alastair Garfield sold 7,763 shares of Rhythm Pharmaceuticals stock in a transaction on Thursday, August 13th. The stock was sold at an average price of $117.57, for a total transaction of $912,695.91. Following the completion of the transaction, the insider directly owned 2,295 shares in the company, valued at approximately $269,823.15. The trade was a 77.18% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders have sold 258,450 shares of company stock valued at $28,796,497. Corporate insiders own 5.90% of the company's stock.

Hedge Funds Weigh In On Rhythm Pharmaceuticals

Hedge funds have recently modified their holdings of the company. GAMMA Investing LLC lifted its holdings in Rhythm Pharmaceuticals by 36.3% in the second quarter. GAMMA Investing LLC now owns 364 shares of the company's stock worth $40,000 after buying an additional 97 shares during the period. Global Retirement Partners LLC bought a new stake in Rhythm Pharmaceuticals during the 2nd quarter valued at approximately $51,000. EverSource Wealth Advisors LLC grew its holdings in shares of Rhythm Pharmaceuticals by 106.4% during the 1st quarter. EverSource Wealth Advisors LLC now owns 549 shares of the company's stock worth $48,000 after acquiring an additional 283 shares during the period. Pinnacle Wealth Planning Services Inc. grew its holdings in shares of Rhythm Pharmaceuticals by 894.0% during the 3rd quarter. Pinnacle Wealth Planning Services Inc. now owns 666 shares of the company's stock worth $63,000 after acquiring an additional 599 shares during the period. Finally, Nisa Investment Advisors LLC raised its position in shares of Rhythm Pharmaceuticals by 9.1% in the 3rd quarter. Nisa Investment Advisors LLC now owns 1,630 shares of the company's stock worth $155,000 after acquiring an additional 136 shares in the last quarter.

Key Rhythm Pharmaceuticals News

Here are the key news stories impacting Rhythm Pharmaceuticals this week:

• Positive Sentiment: Rhythm reported a third-quarter loss of $0.61 per share, better than the consensus loss estimate of $0.68–$0.71 and an improvement from a $0.82 loss a year earlier. Rhythm Pharmaceuticals Reports Q3 Loss, Beats Revenue Estimates
• Positive Sentiment: Revenue reached $92.1 million, exceeding expectations of approximately $85.6 million and rising 79.6% year over year. IMCIVREE revenue increased 29% from the prior quarter, supported by more than 700 U.S. patient start forms for acquired hypothalamic obesity as of September 30. Rhythm Pharmaceuticals Third-Quarter Results and Business Update
• Positive Sentiment: The company has begun the commercial launch of IMCIVREE in Japan and plans to advance bivamelagon into pivotal development for Prader-Willi syndrome, providing additional potential growth drivers. Rhythm Pharmaceuticals Business Update
• Positive Sentiment: Rhythm amended its LG Chem license agreement to reduce royalties on global net sales of its MC4R agonists—including setmelanotide, bivamelagon and RM-718—to 1% from the previous low-to-mid-single-digit structure. It also secured access to up to $750 million in financing for its obesity pipeline. Rhythm and LG Chem License Amendment
• Neutral Sentiment: The revised agreement requires Rhythm to make an additional $350 million in fixed payments to LG Chem over four years, increasing near-term cash commitments despite the lower royalty rate. Rhythm Revises LG Chem Deal and Secures Financing
• Negative Sentiment: Rhythm remains unprofitable, with an $85.59% negative net margin and analysts expecting a full-year loss. Investors may be concerned that funding pipeline expansion will require substantial financing while the company continues to generate losses.

Rhythm Pharmaceuticals Company Profile

Rhythm Pharmaceuticals, Inc is a biopharmaceutical company focused on developing and commercializing therapies for rare genetic diseases of obesity and related metabolic disorders. The company's work is based on the melanocortin-4 receptor (MC4R) pathway, which plays an important role in regulating hunger and energy balance.

Rhythm's principal product is IMCIVREE (setmelanotide), a targeted therapy designed to restore impaired MC4R pathway signaling. In the United States, IMCIVREE is approved for chronic weight management in adults and children at least 6 years old with obesity caused by certain genetic deficiencies, including POMC, PCSK1, or LEPR deficiency, as well as Bardet-Biedl syndrome.

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