Rhythm Pharmaceuticals (NASDAQ:RYTM) Shares Gap Up – Still a Buy?

Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM) gapped up prior to trading on Friday . The stock had previously closed at $90.31, but opened at $96.71. Rhythm Pharmaceuticals shares last traded at $93.5830, with a volume of 1,344,274 shares.

Key Headlines Impacting Rhythm Pharmaceuticals

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

• Positive Sentiment: FDA approved IMCIVREE (setmelanotide) for acquired hypothalamic obesity — the first and only therapy for this rare, treatment‑naïve patient group, creating a clear commercial upside and expanding the drug’s labeled indications. This approval is the main near‑term catalyst supporting the stock. Rhythm Announces FDA Approval of IMCIVREE
• Positive Sentiment: Company management and analysts discussed the new approval in a recent transcript, providing additional color on the patient population, potential launch timing and commercial considerations — supporting investor confidence in revenue upside from the new indication. RYTM Discusses FDA Approval Transcript
• Positive Sentiment: Some brokers have raised or set elevated price targets that imply further upside vs. pre‑news levels, reflecting bullish views on IMCIVREE’s expanded market potential. Brokerages Set RYTM PT at $133.19
• Neutral Sentiment: Valuation pieces are examining RYTM after recent volatility — useful context for longer‑term investors but not an immediate catalyst. These remind investors the stock remains volatile (beta ~2.06) and has wide analyst dispersion. A Look At Rhythm Pharmaceuticals Valuation
• Negative Sentiment: HC Wainwright cut near‑term EPS and lowered its FY2027 outlook and price objective (now $100), trimming Q1–Q4 EPS estimates across 2027 — this reduces short‑term earnings expectations and may cap upside despite the approval. HC Wainwright Lowers RYTM Price Target to $100
• Negative Sentiment: Multiple other brokers published pessimistic forecasts or lowered expectations (Bank of America, RBC, Citizens Jmp, Needham), adding selling pressure by signaling more conservative revenue/profit trajectories or valuation concerns. Bank of America Issues Pessimistic Forecast

Wall Street Analysts Forecast Growth

RYTM has been the topic of several analyst reports. UBS Group restated a “buy” rating on shares of Rhythm Pharmaceuticals in a report on Wednesday, December 17th. Telsey Advisory Group set a $143.00 target price on Rhythm Pharmaceuticals in a report on Thursday, March 12th. Weiss Ratings reiterated a “sell (d-)” rating on shares of Rhythm Pharmaceuticals in a report on Thursday, January 22nd. Canaccord Genuity Group cut their price objective on Rhythm Pharmaceuticals from $141.00 to $140.00 and set a “buy” rating on the stock in a research report on Monday, March 2nd. Finally, Morgan Stanley reduced their price objective on Rhythm Pharmaceuticals from $150.00 to $136.00 and set an “overweight” rating for the company in a research note on Tuesday. One equities 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 stock. Based on data from MarketBeat.com, Rhythm Pharmaceuticals has a consensus rating of “Moderate Buy” and an average target price of $131.13.

Rhythm Pharmaceuticals Stock Performance

The company has a market cap of $6.24 billion, a PE ratio of -29.46 and a beta of 2.06. The company’s 50 day moving average price is $99.31 and its 200-day moving average price is $102.60.

Rhythm Pharmaceuticals (NASDAQ:RYTM) last posted its quarterly earnings data on Thursday, February 26th. The company reported ($0.73) EPS for the quarter, beating the consensus estimate of ($0.79) by $0.06. Rhythm Pharmaceuticals had a negative return on equity of 266.56% and a negative net margin of 103.57%.The business had revenue of $57.25 million for the quarter, compared to the consensus estimate of $56.16 million. During the same quarter in the prior year, the business earned ($0.72) earnings per share. Rhythm Pharmaceuticals’s revenue for the quarter was up 36.9% on a year-over-year basis. Equities research analysts expect that Rhythm Pharmaceuticals, Inc. will post -4.32 EPS for the current year.

Insiders Place Their Bets

In related news, CFO Hunter C. Smith sold 4,385 shares of Rhythm Pharmaceuticals stock in a transaction dated Thursday, February 19th. The stock was sold at an average price of $101.26, for a total value of $444,025.10. Following the completion of the sale, the chief financial officer owned 110,512 shares of the company’s stock, valued at approximately $11,190,445.12. This trade represents a 3.82% decrease in their position. The sale was disclosed in a legal filing with the SEC, which can be accessed through this hyperlink. 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 completion of the sale, 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. The disclosure for this sale is available in the SEC filing. Insiders have sold a total of 27,267 shares of company stock worth $2,719,955 in the last ninety days. Insiders own 6.10% of the company’s stock.

Hedge Funds Weigh In On Rhythm Pharmaceuticals

Large investors have recently modified their holdings of the business. Vanguard Group Inc. raised its position in shares of Rhythm Pharmaceuticals by 39.2% in the third quarter. Vanguard Group Inc. now owns 4,996,427 shares of the company’s stock valued at $504,589,000 after purchasing an additional 1,407,313 shares during the period. RA Capital Management L.P. lifted its stake 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 buying an additional 985,478 shares in the last quarter. Alliancebernstein L.P. boosted its holdings in Rhythm Pharmaceuticals by 1,493.8% in the 3rd quarter. Alliancebernstein L.P. now owns 979,682 shares of the company’s stock worth $98,938,000 after buying an additional 918,212 shares during the period. JPMorgan Chase & Co. boosted its holdings in Rhythm Pharmaceuticals by 445.5% in the 2nd quarter. JPMorgan Chase & Co. now owns 783,559 shares of the company’s stock worth $49,513,000 after buying an additional 639,919 shares during the period. Finally, Capital Research Global Investors purchased a new position in Rhythm Pharmaceuticals in the 3rd quarter valued at approximately $60,417,000.

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.