Rhythm Pharmaceuticals (NASDAQ:RYTM) Trading 10.9% Higher - Should You Buy?

Key Points

• 10.9% intraday jump — RYTM rose 10.9% to about $85.64 on Tuesday but traded only ~42,206 shares (down ~95% versus its ~800,525 average) and remains below its 50- and 200-day moving averages ($96.07 and $101.65).
• Analysts are largely bullish: consensus is a "Moderate Buy" with an average price target of $131.13, and several firms (including Goldman Sachs and Wells Fargo) have raised targets into the $140–$157 range.
• Recent results showed a beat but ongoing losses: Q4 revenue rose ~36.9% y/y to $57.3M and EPS was -$0.73 (vs. -$0.79 est.), yet the company still posts a negative net margin (~103.6%) and negative ROE.

Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM - Get Free Report)'s stock price rose 10.9% on Tuesday . The stock traded as high as $81.69 and last traded at $85.6350. Approximately 42,206 shares were traded during mid-day trading, a decline of 95% from the average daily volume of 800,525 shares. The stock had previously closed at $77.25.

Wall Street Analyst Weigh In

Several research analysts recently issued reports on RYTM shares. UBS Group reissued a "buy" rating on shares of Rhythm Pharmaceuticals in a research note on Wednesday, December 17th. Stifel Nicolaus set a $131.00 price target on shares of Rhythm Pharmaceuticals in a research note on Thursday, February 26th. HC Wainwright dropped their price objective on shares of Rhythm Pharmaceuticals from $110.00 to $100.00 and set a "buy" rating on the stock in a report on Wednesday, March 18th. Wells Fargo & Company raised their target price on Rhythm Pharmaceuticals from $136.00 to $143.00 and gave the company an "overweight" rating in a research note on Thursday, March 12th. Finally, The Goldman Sachs Group boosted their target price on Rhythm Pharmaceuticals from $141.00 to $157.00 and gave the company a "buy" rating in a research report on Friday, December 12th. One analyst has rated the stock with a Strong Buy rating, fifteen have given a Buy rating, two have given a Hold rating and one has assigned a Sell rating to the stock. According to MarketBeat.com, Rhythm Pharmaceuticals presently has an average rating of "Moderate Buy" and an average price target of $131.13.

Rhythm Pharmaceuticals Price Performance

The business's fifty day moving average price is $96.07 and its 200-day moving average price is $101.65. The stock has a market capitalization of $5.87 billion, a price-to-earnings ratio of -27.53 and a beta of 2.06.

Rhythm Pharmaceuticals (NASDAQ:RYTM - Get Free Report) last posted its earnings results on Thursday, February 26th. The company reported ($0.73) earnings per share for the quarter, topping analysts' consensus estimates of ($0.79) by $0.06. The company had revenue of $57.25 million for the quarter, compared to analyst estimates of $56.16 million. Rhythm Pharmaceuticals had a negative net margin of 103.57% and a negative return on equity of 266.56%. The firm's revenue was up 36.9% compared to the same quarter last year. During the same quarter in the prior year, the business posted ($0.72) EPS. Equities research analysts predict that Rhythm Pharmaceuticals, Inc. will post -4.32 earnings per share for the current fiscal year.

Insider Activity at Rhythm Pharmaceuticals

In other news, CAO Christopher Paul German sold 5,614 shares of the firm's stock in a transaction that occurred on Wednesday, March 4th. The stock was 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 trade represents a 97.23% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through this hyperlink. Also, CFO Hunter C. Smith sold 4,385 shares of Rhythm Pharmaceuticals stock in a transaction that occurred on Thursday, February 19th. The shares were sold at an average price of $101.26, for a total value of $444,025.10. Following the transaction, the chief financial officer directly owned 110,512 shares in the company, valued at approximately $11,190,445.12. The trade was a 3.82% decrease in their position. The disclosure for this sale is available in the SEC filing. Over the last three months, insiders sold 27,267 shares of company stock valued at $2,719,955. Company insiders own 6.10% of the company's stock.

Institutional Trading of Rhythm Pharmaceuticals

Institutional investors have recently made changes to their positions in the company. Nisa Investment Advisors LLC grew its position in Rhythm Pharmaceuticals by 956.9% in the 3rd quarter. Nisa Investment Advisors LLC now owns 13,254 shares of the company's stock worth $1,339,000 after purchasing an additional 12,000 shares in the last quarter. EFG Asset Management North America Corp. bought a new position in shares of Rhythm Pharmaceuticals during the 3rd quarter worth approximately $2,047,000. Penserra Capital Management LLC bought a new position in shares of Rhythm Pharmaceuticals during the 3rd quarter worth approximately $3,073,000. Hillsdale Investment Management Inc. purchased a new position in shares of Rhythm Pharmaceuticals in the 3rd quarter worth approximately $4,302,000. Finally, Norges Bank purchased a new position in shares of Rhythm Pharmaceuticals in the 2nd quarter worth approximately $13,105,000.

About Rhythm Pharmaceuticals

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.

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