The Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM) Third-Quarter Results Are Out And Analysts Have Published New Forecasts

It's been a sad week for Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM), who've watched their investment drop 12% to US$98.49 in the week since the company reported its quarterly result. The statutory results were not great - while revenues of US$51m were in line with expectations,Rhythm Pharmaceuticals lost US$0.82 a share in the process. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Taking into account the latest results, the current consensus from Rhythm Pharmaceuticals' 14 analysts is for revenues of US$302.3m in 2026. This would reflect a substantial 73% increase on its revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 28% to US$2.15. Before this earnings announcement, the analysts had been modelling revenues of US$302.5m and losses of US$1.98 per share in 2026. So it's pretty clear consensus is mixed on Rhythm Pharmaceuticals after the new consensus numbers; while the analysts held their revenue numbers steady, they also administered a pronounced increase to per-share loss expectations.

View our latest analysis for Rhythm Pharmaceuticals

The consensus price target held steady at US$122, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Rhythm Pharmaceuticals analyst has a price target of US$142 per share, while the most pessimistic values it at US$95.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Rhythm Pharmaceuticals'historical trends, as the 55% annualised revenue growth to the end of 2026 is roughly in line with the 64% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 21% per year. So it's pretty clear that Rhythm Pharmaceuticals is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$122, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Rhythm Pharmaceuticals. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Rhythm Pharmaceuticals analysts - going out to 2027, and you can see them free on our platform here.

You can also see our analysis of Rhythm Pharmaceuticals' Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.