Company Overview
RYTHM, Inc. operates as a specialized provider of solutions within the United States cannabis and hemp industry, offering consumers hemp-derived tetrahydrocannabinol beverages alongside other hemp-derived products available through retailers, online channels, and direct-to-retail partnerships. The company functions within the Consumer Defensive sector and the Tobacco industry, a classification that reflects its regulatory environment and product categorization despite its specific focus on hemp derivatives. This entity is a micro-cap organization with a market capitalization of $40.81M, an annual revenue of $17.28M, and an employee count listed as 1. These specific valuation and scale metrics indicate that RYTHM, Inc. occupies a very small position in the broader market, characterized by limited operational breadth and a capital structure typical of early-stage or niche-focused enterprises rather than established industry leaders. The minimal employee count juxtaposed against the reported revenue suggests a business model heavily reliant on external partnerships or specific operational efficiencies, while the market cap places it in a high-volatility segment of the equity market.
Financial Health
The company generated revenue of $17.28M over the trailing twelve months, yet reported a net income of $-34,740,000 and an EBITDA of $-16,822,000. The substantial gap between the positive revenue of $17.28M and the negative net income of $-34,740,000 reveals a cost structure where expenses, including cost of goods sold and operating expenditures, significantly exceed sales, resulting in a loss that is more than double the revenue generated. Free cash flow stands at $-21,676,124, which indicates a negative financial flexibility where the company is currently burning cash rather than generating liquidity to fund operations or invest in growth without external capital infusion. The gross margin is reported at 59.0%, suggesting that the cost of producing hemp-derived beverages and products consumes 41.0% of sales, while the operating margin of -33.7% and profit margin of -192.4% demonstrate that overhead costs and other expenses are eroding profitability to a degree where losses exceed revenue, and the profit margin specifically shows a loss nearly twice the size of the total sales. On the balance sheet, the company holds $32.22M in cash against $80.62M in debt, resulting in a debt-to-equity ratio of 619.21, which signifies an extremely leveraged financial position where debt obligations vastly outweigh equity and available cash reserves. The current ratio is 1.11, indicating that the company possesses slightly more current assets than current liabilities, suggesting a tight but technically solvable short-term liquidity position. Return on Equity is -169.0% and Return on Assets is -17.9%, metrics that reveal management is currently destroying value relative to the shareholders' equity and the total asset base utilized, rather than generating returns.
Valuation Assessment
The trailing P/E ratio is listed as N/A and the forward P/E is also N/A, a status that implies that traditional earnings-based valuation metrics are inapplicable due to the company's lack of profitability and the absence of a positive earnings trajectory to project forward. The price-to-book ratio is 3.13, indicating that the market values the company's equity at more than three times its book value, a premium that investors are placing on the intangible assets or specific market positioning despite the negative earnings. The price-to-sales ratio is 2.36 and the EV/EBITDA is -5.30, suggesting that the market is pricing the company based on revenue multiples rather than earnings power, while the negative EV/EBITDA reinforces the inability to value the firm on cash flow generation relative to its enterprise value. The 52-week high is $53.65 and the 52-week low is $13.22, meaning the stock has experienced extreme volatility within this trading range, currently trading at a price point that fluctuates significantly below the annual peak. The beta is 10.02, which indicates that the stock price is highly sensitive to market movements and exhibits volatility more than ten times that of the broader market, reflecting the high risk associated with its micro-cap status and sector.
Growth & Income
The revenue growth year-over-year is N/A and the earnings growth year-over-year is N/A, indicating that there is no calculated historical growth rate available to compare earnings expansion against revenue expansion within the provided data. Since the company is not a dividend payer, the dividend yield is N/A and the payout ratio is 0.0%, which means the company does not distribute cash to shareholders and instead retains all earnings or losses to fund operations or reduce debt. Because the company reinvests all available resources into its business activities rather than paying dividends, the income profile relies entirely on potential future capital appreciation or operational turnaround rather than current income generation. The overall growth and income profile is characterized by a lack of measurable historical growth rates and a complete absence of dividend income, presenting a speculative investment case dependent on future operational improvements rather than current financial performance or shareholder distributions.