Rhythm Pharmaceuticals (NASDAQ:RYTM) Shares Gap Down - What's Next?

Key Points

• Rhythm Pharmaceuticals shares fell sharply, opening at $84.83 versus a prior close of $93.44 and last trading near $83.90, below both its 50-day and 200-day moving averages.
• Analyst sentiment remains broadly positive, with 18 Buy ratings, three Holds and one Sell; the stock has a “Moderate Buy” consensus and an average price target of $142.50.
• The company beat quarterly expectations with an adjusted loss of $0.61 per share versus the projected $0.71 loss and revenue of $92.13 million, up 79.6% year over year, although it continues to post negative margins and return on equity.

Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM - Get Free Report) gapped down before the market opened on Tuesday. The stock had previously closed at $93.44, but opened at $84.83. Rhythm Pharmaceuticals shares last traded at $83.8950, with a volume of 1,186,779 shares.

Wall Street Analyst Weigh In

A number of brokerages recently commented on RYTM. Leerink Partners started coverage on shares of Rhythm Pharmaceuticals in a research report on Monday, September 14th. They set an "outperform" rating and a $133.00 price objective on the stock. JPMorgan Chase & Co. lowered their target price on Rhythm Pharmaceuticals from $146.00 to $145.00 and set an "overweight" rating on the stock in a research note on Thursday, October 15th. Deutsche Bank Aktiengesellschaft began coverage on Rhythm Pharmaceuticals in a research report on Friday, August 28th. They issued a "hold" rating and a $120.00 target price on the stock. Citizens Jmp raised their price target on Rhythm Pharmaceuticals from $155.00 to $160.00 and gave the stock a "market outperform" rating in a research note on Wednesday, August 5th. Finally, Wolfe Research began coverage on Rhythm Pharmaceuticals in a research note on Thursday, September 17th. They set an "outperform" rating for the company. Eighteen equities research analysts have rated the stock with a Buy rating, three have given a Hold rating and one has issued a Sell rating to the company. According to data from MarketBeat.com, Rhythm Pharmaceuticals currently has an average rating of "Moderate Buy" and an average target price of $142.50.

Rhythm Pharmaceuticals Stock Performance

The company has a market capitalization of $5.70 billion, a P/E ratio of -26.52 and a beta of 2.01. The stock's fifty day moving average price is $96.85 and its 200-day moving average price is $97.29.

Rhythm Pharmaceuticals (NASDAQ:RYTM - Get Free Report) last posted its quarterly earnings results on Tuesday, November 3rd. The company reported ($0.61) EPS for the quarter, topping analysts' consensus estimates of ($0.71) by $0.10. The business had revenue of $92.13 million during the quarter, compared to analysts' expectations 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% on a year-over-year basis. During the same quarter last year, the company posted ($0.82) earnings per share. On average, research analysts predict that Rhythm Pharmaceuticals, Inc. will post -2.77 EPS for the current fiscal year.

Insiders Place Their Bets

In other Rhythm Pharmaceuticals news, EVP Jennifer Lee sold 75,834 shares of the company's stock in a transaction on Thursday, August 13th. The stock was sold at an average price of $117.38, for a total value of $8,901,394.92. Following the transaction, the executive vice president directly owned 54,233 shares of the company's stock, valued at $6,365,869.54. This represents a 58.30% decrease in their position. The sale was disclosed in a filing with the SEC, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO David Meeker sold 50,000 shares of the company's stock in a transaction on Monday, September 14th. The shares were sold at an average price of $102.67, for a total value of $5,133,500.00. Following the completion of the transaction, the chief executive officer directly owned 239,258 shares in the company, valued at approximately $24,564,618.86. This represents a 17.29% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 258,450 shares of company stock worth $28,796,497 over the last three months. 5.90% of the stock is currently owned by corporate insiders.

Institutional Trading of Rhythm Pharmaceuticals

Hedge funds and other institutional investors have recently bought and sold shares of the business. GAMMA Investing LLC increased its position in Rhythm Pharmaceuticals by 36.3% during the 2nd quarter. GAMMA Investing LLC now owns 364 shares of the company's stock valued at $40,000 after purchasing an additional 97 shares during the period. 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. ProShare Advisors LLC raised its position in shares of Rhythm Pharmaceuticals by 1.9% in the 3rd quarter. ProShare Advisors LLC now owns 9,653 shares of the company's stock worth $919,000 after acquiring an additional 177 shares in the last quarter. Cim Investment Management Inc. lifted its stake in shares of Rhythm Pharmaceuticals by 7.2% in the 2nd quarter. Cim Investment Management Inc. now owns 3,209 shares of the company's stock valued at $356,000 after purchasing an additional 216 shares during the period. Finally, Inspire Investing LLC lifted its stake in shares of Rhythm Pharmaceuticals by 7.9% in the 3rd quarter. Inspire Investing LLC now owns 3,688 shares of the company's stock valued at $351,000 after purchasing an additional 271 shares during the period.

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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