Rhythm Pharmaceuticals Exceeds Q2 Expectations, Maintains Buy Rating

Rhythm Pharmaceuticals reported strong Q2 performance, exceeding topline expectations despite increased operational expenses. The company is making progress in its launch readiness for setmelanotide in adult and pediatric endocrinology, with a focus on a specialty launch strategy. Analyst Whitney Ijem maintains a Buy rating with an unchanged price target of $105, citing the management's confidence in the potential of setmelanotide and anticipation of future data readouts.

Rhythm Pharmaceuticals, Inc. (RYTM) reported strong second-quarter (Q2) 2025 performance, exceeding topline expectations despite increased operational expenses. The company's quarterly loss per share was $0.75, compared to a Zacks Consensus Estimate of $0.66 [2]. This represents a 13.64% earnings surprise, as the company had surpassed consensus earnings estimates three times over the last four quarters [2].

Operational expenses, primarily attributed to clinical trial costs, development activities, and marketing efforts, increased significantly. However, these expenses are seen as strategic investments for future growth [1]. The company's revenues for the quarter ended June 2025 were $48.5 million, surpassing the Zacks Consensus Estimate by 11.73% [2].

Rhythm Pharmaceuticals is making significant progress in its launch readiness for setmelanotide in adult and pediatric endocrinology, with a focus on a specialty launch strategy. The company's management is confident in the potential of setmelanotide, particularly in the exploratory trial for Prader-Willi Syndrome (PWS), and anticipates future data readouts [1].

Analyst Whitney Ijem from Canaccord Genuity maintained a Buy rating on RYTM with an unchanged price target of $105, citing the company's strategic direction and growth potential [1]. H.C. Wainwright also reiterated a Buy rating on the stock with a $100.00 price target [1]. The stock has seen a dramatic price change over the past six months, increasing from $60.010 to $90.010, a 49.99% increase [1].

The sustainability of RYTM's immediate price movement will depend on management's commentary on the earnings call. The current consensus EPS estimate for the coming quarter is -$0.67 on $46.85 million in revenues, and for the current fiscal year, it is -$2.80 on $174.58 million in revenues [2]. Investors should be mindful of the industry's outlook, as the Medical - Biomedical and Genetics industry is currently in the bottom 43% of the 250 plus Zacks industries [2].

References:
[1] https://www.tipranks.com/news/ratings/strong-q2-performance-and-strategic-investments-drive-buy-rating-for-rhythm-pharmaceuticals-ratings
[2] https://finance.yahoo.com/news/rhythm-pharmaceuticals-inc-rytm-reports-121003131.html