Is Rhythm Pharmaceuticals, Inc. overvalued or undervalued?

Jun 25 2025 08:50 AM IST
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As of November 2, 2021, Rhythm Pharmaceuticals, Inc. is considered overvalued with a risky valuation grade, highlighted by a Price to Book Value of 228.70 and an ROE of -926.82%, despite a 48.39% stock return over the past year, which outperformed the S&P 500's 10.26%.
As of 2 November 2021, the valuation grade for Rhythm Pharmaceuticals, Inc. moved from does not qualify to risky. The company is currently considered overvalued. Key ratios include a Price to Book Value of 228.70, an EV to Sales ratio of 31.22, and an ROE of -926.82%.

In comparison with peers, Merus NV has a P/E of -14.25 and an EV to EBITDA of -11.71, while CymaBay Therapeutics, Inc. shows a P/E of -35.38 and an EV to EBITDA of -34.09. The stark contrast in these ratios suggests that Rhythm Pharmaceuticals, Inc. is not only underperforming compared to its peers but also indicates a significant overvaluation given its current financial metrics. Over the past year, the stock has returned 48.39%, outperforming the S&P 500's 10.26%, but this performance does not justify its current valuation.
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