Update shared on 05 Nov 2025
Fair value Increased 3.28%Analysts have raised their price target for Rhythm Pharmaceuticals from $117.57 to $121.43 per share, citing improved profit margin projections and increased optimism about upcoming label expansions for setmelanotide.
Analyst Commentary
Recent updates from Street research provide a balanced view on Rhythm Pharmaceuticals, with both bullish and bearish perspectives influencing the company's outlook and valuation.
Bullish Takeaways- Multiple analysts have raised their price targets, citing strong clinical results for Imcivree and the oral formulation of bivamelagon in hypothalamic obesity.
- Expectations are high for meaningful label expansion, as demonstrated by key opinion leader optimism and anticipation for the December FDA decision on setmelanotide.
- Commercial performance in Bardet-Biedl syndrome is seen as positioning the company well for new market opportunities and potential revenue growth.
- Continued global commercial execution and positive sentiment around anticipated approval timelines contribute to a more favorable risk-reward profile.
- Some analysts have downgraded their outlook, viewing the near-term label expansion as already reflected in the stock's current price.
- Concerns have been raised that the upcoming Prader-Willi readout offers limited near-term catalytic potential for the stock.
- Caution is noted regarding whether existing clinical and commercial achievements can sustain share price momentum given high expectations in the market.
What's in the News
- The FDA has accepted for filing Rhythm Pharmaceuticals' supplemental New Drug Application (sNDA) for setmelanotide for the treatment of acquired hypothalamic obesity. The agency granted a Priority Review and set a PDUFA goal date of December 20, 2025 (Key Developments).
- Setmelanotide, under the IMCIVREE brand, is already approved in the U.S., Europe, and UK for obesity due to Bardet-Biedl syndrome and POMC, PCSK1, or LEPR deficiencies (Key Developments).
Valuation Changes
- Consensus Analyst Price Target has increased from $117.57 to $121.43 per share. This reflects greater upside potential.
- Discount Rate has edged down slightly from 6.85% to 6.84%. This indicates a marginally lower risk premium applied in valuation models.
- Revenue Growth projection has risen notably from 68.2% to 70.9%. This suggests stronger expectations for sales expansion.
- Net Profit Margin estimate has increased significantly from 31.5% to 45.4%. This points to improved margin forecasts.
- Future P/E ratio has dropped substantially from 49.6x to 30.4x. This indicates a shift toward a more attractive valuation relative to projected earnings.
Disclaimer
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