Rhythm Pharmaceuticals (NASDAQ:RYTM) Shares Gap Up After Earnings Beat

Key Points

• Rhythm Pharmaceuticals gapped up after beating expectations, reporting Q EPS of ($0.83) vs. consensus ($0.86) and revenue of $60.11M (vs. $55.78M expected), with revenue up 83.8% year‑over‑year; the stock opened at $93.90 after a $85.58 close and last traded near $92.80.
• Wall Street sentiment is broadly positive with a consensus rating of "Moderate Buy" and a $131.13 price target, though analysts have mixed target adjustments (Guggenheim raised to $143 while others trimmed targets and Weiss kept a sell rating).
• There has been notable insider selling (27,267 shares worth about $2.72M in the last 90 days, including CFO and CAO sales) even as large institutions like Vanguard and RA Capital hold sizable stakes; the company remains unprofitable with a negative net margin (-103.57%) and ROE (-266.56%), market cap ~$6.41B.

Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM - Get Free Report) gapped up before the market opened on Tuesday following a better than expected earnings announcement. The stock had previously closed at $85.58, but opened at $93.90. Rhythm Pharmaceuticals shares last traded at $92.80, with a volume of 446,340 shares changing hands.

The company reported ($0.83) earnings per share (EPS) for the quarter, beating analysts' consensus estimates of ($0.86) by $0.03. Rhythm Pharmaceuticals had a negative net margin of 103.57% and a negative return on equity of 266.56%. The business had revenue of $60.11 million for the quarter, compared to analyst estimates of $55.78 million. During the same period last year, the business posted ($0.81) EPS. Rhythm Pharmaceuticals's revenue was up 83.8% compared to the same quarter last year.

Wall Street Analyst Weigh In

A number of research firms recently issued reports on RYTM. Guggenheim raised their target price on shares of Rhythm Pharmaceuticals from $140.00 to $143.00 and gave the company a "buy" rating in a research note on Friday, February 27th. Telsey Advisory Group set a $143.00 target price on shares of Rhythm Pharmaceuticals in a research note on Thursday, March 12th. Bank of America lowered their target price on shares of Rhythm Pharmaceuticals from $145.00 to $139.00 and set a "buy" rating on the stock in a research note on Tuesday, March 17th. Morgan Stanley lowered their target price on shares of Rhythm Pharmaceuticals from $150.00 to $136.00 and set an "overweight" rating on the stock in a research note on Tuesday, March 17th. Finally, Weiss Ratings restated a "sell (d-)" rating on shares of Rhythm Pharmaceuticals in a research report on Tuesday, April 21st. One research analyst has rated the stock with a Strong Buy rating, fifteen have issued a Buy rating, two have issued a Hold rating and one has issued a Sell rating to the company's stock. According to MarketBeat, Rhythm Pharmaceuticals has a consensus rating of "Moderate Buy" and a consensus price target of $131.13.

Insider Activity

In related news, CFO Hunter C. Smith sold 4,385 shares of the business's stock in a transaction dated Thursday, February 19th. The stock was sold at an average price of $101.26, for a total transaction of $444,025.10. Following the transaction, the chief financial officer directly owned 110,512 shares in the company, valued at $11,190,445.12. The trade was a 3.82% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available at this link. Also, CAO Christopher Paul German sold 5,614 shares of the business's stock in a transaction dated Wednesday, March 4th. The shares were sold at an average price of $89.56, for a total value of $502,789.84. Following the transaction, the chief accounting officer owned 160 shares in the company, valued at $14,329.60. This represents a 97.23% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold 27,267 shares of company stock worth $2,719,955 over the last 90 days. Corporate insiders own 6.10% of the company's stock.

Hedge Funds Weigh In On Rhythm Pharmaceuticals

Institutional investors and hedge funds have recently added to or reduced their stakes in the company. Vanguard Group Inc. boosted its position in shares of Rhythm Pharmaceuticals by 39.2% during the 3rd quarter. Vanguard Group Inc. now owns 4,996,427 shares of the company's stock valued at $504,589,000 after acquiring an additional 1,407,313 shares in the last quarter. RA Capital Management L.P. boosted its position in shares of Rhythm Pharmaceuticals by 17.3% during the 4th quarter. RA Capital Management L.P. now owns 6,666,837 shares of the company's stock valued at $713,618,000 after acquiring an additional 985,478 shares in the last quarter. Alliancebernstein L.P. boosted its position in shares of Rhythm Pharmaceuticals by 1,493.8% during the 3rd quarter. Alliancebernstein L.P. now owns 979,682 shares of the company's stock valued at $98,938,000 after acquiring an additional 918,212 shares in the last quarter. Capital Research Global Investors acquired a new stake in shares of Rhythm Pharmaceuticals during the 3rd quarter valued at about $60,417,000. Finally, Jennison Associates LLC boosted its position in shares of Rhythm Pharmaceuticals by 123.2% during the 4th quarter. Jennison Associates LLC now owns 918,567 shares of the company's stock valued at $98,323,000 after acquiring an additional 507,017 shares in the last quarter.

Rhythm Pharmaceuticals Stock Performance

The firm's 50-day moving average price is $88.12 and its two-hundred day moving average price is $99.56. The firm has a market capitalization of $6.41 billion, a price-to-earnings ratio of -30.07 and a beta of 1.94.

Rhythm Pharmaceuticals Company Profile

Rhythm Pharmaceuticals, Inc is a clinical‐stage biotechnology company dedicated to developing targeted therapies for rare genetic diseases of obesity and metabolic dysfunction. The company's research focuses on the melanocortin‐4 receptor (MC4R) pathway, which plays a central role in regulating appetite, energy expenditure and body weight. Using proprietary peptide technology, Rhythm aims to provide precision treatments to patients with specific genetic variants that disrupt normal weight regulation.

The company's lead investigational product, setmelanotide, is a selective MC4R agonist designed to restore signaling in patients with deficiencies in genes such as POMC, LEPR and PCSK1.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.