MeritValue

RHYTHM PHARMACEUTICALS, INC.

RYTMdata completeness 100%11 fiscal years on file
The thesis, from the filings

RHYTHM PHARMACEUTICALS, INC. earns about -151% on invested capital, but has diluted owners by 31% over 5 years — worth asking whether the growth reaches owners. The cash-flow models don't apply cleanly here — the ledger says why below.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$3.15M1$23.6M2$77.4M3$130.1M3$189.8M3
Net income−$69.6M4−$181.1M5−$184.7M6−$260.6M6−$196.5M6
Operating cash flow−$146M7−$173.4M8−$136.2M9−$113.9M9−$115.7M9
Capital expenditure$434,00010$281,00011$47,00012$012$953,00012
Free cash flow (derived)−$146.4M7−$173.7M8−$136.2M9−$113.9M9−$116.6M9
Total debt——$106.1M13$109.8M14$108.2M14
Cash & equivalents$59.2M15$127.7M16$60.1M17$89.1M18$54.3M18
Diluted shares49.6M52.1M57.7M61.0M65.0M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$21.4
your share of equity
Profit it earned you last year
−$30.24
Free cash flow it threw off
−$17.95
Debt you’d be carrying
$16.65

10 shares is a claim on $21.4 of net worth that earned you −$30.24 and generated −$17.95 of cash last year, against $16.65 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
-151% avg · 5y
FY21 -24%FY22 -102%FY23 -62%FY24 -485%FY25 -80%

It earned an average -151% on invested capital over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
+31% shares · 5y

Share count is up 31% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has held roughly steady.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
DCF · Growth Exit 5Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
Earnings Power Value
not applicable
normalized (5y-median) earnings non-positive — EPV undefined
Graham Number
not applicable
diluted EPS missing or non-positive — Graham Number undefined

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001558370-24-002181 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0001558370-25-001889 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0001628280-26-012399 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-12-31 · accession 0001558370-24-002181 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001558370-25-001889 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001628280-26-012399 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001558370-24-002181 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001558370-25-001889 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001628280-26-012399 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001558370-24-002181 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0001558370-25-001889 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001628280-26-012399 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2023-12-31 · accession 0001558370-25-001889 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2024-12-31 · accession 0001628280-26-012399 (LongTermDebtNoncurrent)
  15. 10-K · period ending 2021-12-31 · accession 0001558370-23-002613 (CashAndCashEquivalentsAtCarryingValue)
  16. 10-K · period ending 2022-12-31 · accession 0001558370-24-002181 (CashAndCashEquivalentsAtCarryingValue)
  17. 10-K · period ending 2023-12-31 · accession 0001558370-25-001889 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2024-12-31 · accession 0001628280-26-012399 (CashAndCashEquivalentsAtCarryingValue)