Rhythm Pharmaceuticals, Inc. (RYTM) Stock: A Good Pick In The Biotechnology Industry?

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Rhythm Pharmaceuticals, Inc. (RYTM) is falling in the market today. The company, focused on the biotechnology industry, is currently priced at $22.61 after a move down of 0.00% so far in today’s session. As it relates to biotechnology stocks, there are several factors that have the ability to generate movement in the market. News is one of the most common reasons for movement. Here are the recent stories centered around RYTM:

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May-30-19 08:00AM Rhythm Pharmaceuticals to Present at Jefferies 2019 Healthcare Conference
May-07-19 10:54AM Heres What Hedge Funds Think About Rhythm Pharmaceuticals, Inc. (RYTM)
08:00AM Rhythm Pharmaceuticals to Present at Bank of America Merrill Lynch 2019 Health Care Conference
May-03-19 08:36AM Rhythm Pharmaceuticals Reports First Quarter 2019 Financial Results
Apr-26-19 12:13PM If You Had Bought Rhythm Pharmaceuticals (NASDAQ:RYTM) Stock A Year Ago, You Could Pocket A 10% Gain Today

However, when making a decision with regard to investing, prospective investors should take a look at far more than just news, this is especially the case in the generally speculative biotech industry. Here’s what’s happing when it comes to Rhythm Pharmaceuticals, Inc..

Recent Trends From RYTM

While a decline in a single session, like the fall that we’re seeing from Rhythm Pharmaceuticals, Inc. may lead to fear in some investors, a single session move by itself should not be the reason for a decision to, or not to, invest in a stock. It’s generally important to dig into trends experienced by the stock for a period longer than a single trading session. When it comes to RYTM, here are the movements that investors have experienced:

  • Past Seven Days – Throughout the last 5 trading sessions, RYTM has seen a change in value amounting to -11.75%.
  • Past 30 Days – The return on investment from Rhythm Pharmaceuticals, Inc. throughout the last month comes to -13.44%.
  • Quarterly – Throughout the last three months, the stock has produced a return on investment of -23.33%
  • Past Six Months – Throughout the last six months, we’ve seen a performance that amounts to -17.00% from the company.
  • Year To Date – Since the the last trading session of last year RYTM has generated a return of -15.89%.
  • Full Year – Finally, over the past year, we’ve seen a change of -31.36% out of RYTM. Over this period of time, the stock has sold at a high of -39.27% and a low price of 1.03%.

Ratios Of Note

Looking at a few ratios associated with a stock can provide prospective investors an understanding of just how dangerous and/or potentially profitable a stock pick might be. Here are some of the most important ratios to consider when digging into RYTM.

Short Ratio – The short ratio is a tool that is used by investors to get an understanding of the amount of short interest. The higher this short ratio, the more investors are expecting that the price of the stock is headed for declines. Throughout the sector, biotech stocks can carry a higher short ratio. However, we also tend to see a lot of short squeezes in the sector. Nonetheless, as it relates to Rhythm Pharmaceuticals, Inc., it’s short ratio amounts to 14.22.

Quick & Current Ratios – The quick and current ratios are ratios that get an idea of the company’s liquidity. Essentially, they measure If a company is able to pay for its debts when they mature based on quick assets or current assets. In the biotech sector, companies are heavily reliant on continued investor support, the current and quick ratios can look upsetting. Nonetheless, quite a few gems in the biotechnology sector come with positive quick and current ratios. As far as RYTM, the quick and current ratios come to 18.30 and 18.30 respectively.  

Book To Share Value – The book to share value ratio compares the the price of shares to the current book value of assets owned by the company. when it comes to Rhythm Pharmaceuticals, Inc., that ratio comes in at 6.41.

Cash To Share Value – The cash to share value ratio compares the total amount of cash the company has on hand to the value of the company’s stock. Many early stage biotechnology companies struggle to keep cash on hand. So, if you’re considering an investment in a biotech stock, this is an important ratio to look into. In this case, the cash to share value ratio works out to 6.56.

Analyst Opinions Of Rhythm Pharmaceuticals, Inc.

While it’s never a smart idea to unknowingly follow the opinions of analysts, it is a smart idea to use their analysis when validating your own thoughts when it comes to making an investment decision in the biotech industry. Here are the most recent moves that we’ve seen from analysts when it comes to RYTM.

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Mar-13-19 Initiated Ladenburg Thalmann Buy $43
Sep-07-18 Resumed Morgan Stanley Overweight
Jun-25-18 Reiterated Needham Buy $36 → $42
Jun-15-18 Reiterated Needham Buy $32 → $36
Oct-30-17 Initiated Needham Buy $32

Smart Money Follows Big Money

One thing that I have come to understand so far in my brief time here has been that smart money tends to follow big money. That is to say, investors that are trying to keep the risk down will watch investments made by institutions and insiders of the company. So, where is the big money when it comes to RYTM? Here’s the data:

  • Institutions – Currently, institutional investors own 91.10% of Rhythm Pharmaceuticals, Inc.. Nonetheless, it’s worth noting that the ownership held by institutions has changed in the amount of -2.56% over the last 3 months.
  • Insider Holdings – When it comes to insiders, members of the management team and others close to RYTM currently hold 1.60% of the company. Insider ownership of the company has seen a move of 0 in the past 3 months.

Looking At Share Counts

Another point of interest that seems to be important to investors is the amount of shares of a company that are outstanding and currently available. At the moment, there are 33.76M shares of Rhythm Pharmaceuticals, Inc. outstanding. Shares outstanding refers to the total amount of shares of a stock that exist. As far as the float goes, or the amount of shares that are actually available on the retail market, RYTM has a float of 30.56M.

I also find it important to dig into the short percent. Think about it, when a high percentage of the float is shorted, the overall feeling among investors is that the stock is going to lose value. With regard to RYTM, the percentage of the float that is shorted currently sits at 4.67%. Most traders believe that a concerning short percent of the float would be any percentage over 40%. Nonetheless, I have calculated that any short percent of the float over 26% is generally a risky play.

Financial Performance

At the moment, analysts are expecting that throughout the full year, earnings per diluted share will come in at $-3.39. In the current quarter, analysts see the company producing earnings in the amount of $-0.86. Over the last 5 years, RYTM has generated revenue in the amount of $0 with earnings coming in at -38.10%. On a quarter over quarter basis, earnings have seen movement of -39.60% and revenue has seen movement of 0.

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