Tempus AI
TEM
$48.41
-7.74%
Tempus AI Inc is a technology company that has built the Tempus Platform, a technology platform to free healthcare data from silos and an operating system to make the resulting data useful, operating in the healthcare information services industry. The company is a pioneer in applying AI, including generative AI, to laboratory diagnostics, positioning itself as a disruptor in precision medicine and data-driven healthcare. The current investor narrative centers on Tempus AI's rapid revenue growth trajectory, driven by its diagnostics segment, and its path to profitability, as the company narrows losses while expanding its AI-powered platform. Recent news highlights the validation of its AI capabilities through Pathos AI's acquisition of a MET inhibitor identified by its Foundry platform, underscoring the potential of its technology beyond diagnostics.…
TEM
Tempus AI
$48.41
TEM 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Tempus AI's 12-month outlook, with a consensus price target around $66.57 and implied upside of +37.5% versus the current price.
Average Target
$66.57
0 analysts
Implied Upside
+37.5%
vs. current price
Analyst Count
—
covering this stock
Price Range
$35 - $100
Analyst target range
Tempus AI is covered by 16 analysts, with a consensus recommendation of 'Buy' (mean recommendation 2.11 on a 1-5 scale where 1 is Strong Buy). The average target price is $67.06, implying approximately 27.8% upside from the current price of $52.47. The distribution leans bullish, with recent ratings from Needham, BTIG, HC Wainwright, TD Cowen, Guggenheim, and Morgan Stanley all maintaining Buy or Overweight ratings. The target price range spans from a low of $35.00 to a high of $100.00. The high target of $100.00 assumes significant multiple expansion and accelerating growth, potentially driven by AI platform adoption and new product launches. The low target of $35.00 prices in margin compression, competitive losses, or a recessionary impact. The wide spread between low and high ($65) indicates high uncertainty about the company's future performance. Recent analyst actions show consistent bullish sentiment, with no downgrades in the past six months, reinforcing the positive consensus.
Bulls vs Bears: TEM Investment Factors
Tempus AI presents a classic high-growth, high-risk investment profile. The bull case is anchored by 36% revenue growth, improving margins, strong analyst support with 27.8% upside to the average target, and AI platform validation. The bear case centers on persistent losses, negative free cash flow, high debt, extreme volatility, and gross margin instability. Currently, the bull side has stronger evidence given the accelerating revenue trajectory and consensus buy rating, but the single most important tension is the path to profitability: if Tempus can demonstrate a credible timeline to positive free cash flow, the stock could re-rate significantly higher; if cash burn continues without a clear inflection, the downside to the $35 low target becomes a real risk.
Bullish
- Strong Revenue Growth Trajectory: Tempus AI's Q1 2026 revenue of $348.1 million grew 36.1% year-over-year, with accelerating growth from $200.7 million in Q4 2024. This rapid top-line expansion supports the thesis that the company's AI-powered diagnostics platform is gaining traction in the healthcare market.
- Improving Profitability Metrics: Net margin improved from -41.9% in Q3 2024 to -36.2% in Q1 2026, while operating margin improved from -29.6% to -22.2% over the same period. This narrowing of losses indicates the company is making progress toward breakeven as it scales.
- Analyst Consensus Buy Rating: With 16 analysts covering the stock, the consensus is 'Buy' (mean recommendation 2.11 on a 1-5 scale) and the average target price of $67.06 implies 27.8% upside from the current price of $52.47. No downgrades in the past six months reinforce positive sentiment.
- AI Platform Validation via Pathos Deal: Pathos AI's acquisition of a MET inhibitor identified by Tempus's Foundry platform validates the company's AI capabilities beyond diagnostics, potentially opening new revenue streams in drug discovery and development partnerships.
Bearish
- Persistent Unprofitability and Cash Burn: Tempus AI reported a net loss of $125.9 million in Q1 2026 and negative free cash flow of $81.5 million for the quarter, with trailing twelve-month free cash flow at -$216.5 million. The company remains dependent on external financing to fund operations.
- High Leverage and Debt Burden: With a debt-to-equity ratio of 2.70, Tempus AI carries significant leverage. Interest expense was $14.3 million in Q1 2026, adding to the financial strain and increasing vulnerability to rising interest rates or credit tightening.
- Extreme Volatility and Market Risk: The stock's beta of 3.462 indicates it is 246% more volatile than the market, amplifying downside risk. The stock has declined 13.5% over the past year while the S&P 500 gained 18.4%, and it sits near the low end of its 52-week range.
- Gross Margin Volatility: Gross margin dropped sharply from 89.7% in Q4 2025 to 62.7% in Q1 2026, a decline of 27 percentage points. While recent quarters have been around 60-62%, this volatility raises questions about the sustainability of margins as the business scales.
TEM Technical Analysis
The prevailing trend for Tempus AI is a sustained downtrend, with the stock declining 13.5% over the past year, significantly underperforming the S&P 500's 18.4% gain. The current price of $52.47 sits at 50.3% of its 52-week range ($41.73 low to $104.32 high), indicating it is closer to the low end, which could suggest a value opportunity or reflect ongoing fundamental challenges. The stock's beta of 3.462 implies it is 246% more volatile than the market, amplifying both upside and downside risks. Short-term momentum shows a mixed picture: the 1-month price change is +7.5%, while the 3-month change is -6.1%, indicating a recent bounce but still negative over the quarter. This divergence from the longer-term downtrend could signal a potential short-term reversal or a temporary pullback within a broader bearish structure. The relative strength index (RSI) is not directly provided, but the recent price action suggests oversold conditions may be developing. Key support lies near the 52-week low of $41.73, a break below which would signal further downside and potentially test lower levels. Resistance is at the 52-week high of $104.32, and a breakout above this level would indicate a major trend reversal. The stock's high beta of 3.462 means it is significantly more volatile than the market, requiring careful position sizing and risk management.
Beta
3.46
3.46x market volatility
Max Drawdown
-59.0%
Largest decline past year
52-Week Range
$42-$104
Price range past year
Annual Return
-20.6%
Cumulative gain past year
| Period | TEM Return | S&P 500 |
|---|---|---|
| 1m | -4.8% | -0.6% |
| 3m | -12.2% | +5.4% |
| 6m | -25.9% | +8.3% |
| 1y | -20.6% | +18.3% |
| ytd | -22.4% | +8.8% |
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TEM Fundamental Analysis
Tempus AI's revenue is growing rapidly, with Q1 2026 revenue of $348.1 million, up 36.1% year-over-year from $255.7 million in Q1 2025. The multi-quarter trend shows accelerating growth: revenue increased from $200.7 million in Q4 2024 to $314.6 million in Q2 2025, $334.2 million in Q3 2025, $367.2 million in Q4 2025, and $348.1 million in Q1 2026. The diagnostics segment, which generated $261.1 million in Q1 2026, is the primary growth driver. This robust growth supports the investment case for a company scaling its AI platform. The company remains unprofitable, with a net loss of $125.9 million in Q1 2026, though the net margin improved to -36.2% from -41.9% in Q3 2024. Gross margin was 62.7% in Q1 2026, down from 89.7% in Q4 2025 but relatively stable around 60-62% in recent quarters. Operating margin was -22.2% in Q1 2026, improving from -29.6% in Q3 2024, indicating progress toward profitability. Tempus AI has a debt-to-equity ratio of 2.70, indicating significant leverage, and a current ratio of 3.13, suggesting ample short-term liquidity. Free cash flow was negative $81.5 million in Q1 2026, and trailing twelve-month free cash flow was -$216.5 million, meaning the company relies on external financing to fund operations. ROE was -49.9%, reflecting substantial shareholder losses.
Quarterly Revenue
$348116000.0B
2026-03
Revenue YoY Growth
+36.1%
YoY Comparison
Gross Margin
62.7%
Latest Quarter
Free Cash Flow
$-216498000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is TEM Overvalued?
Since Tempus AI has negative net income (net loss of $125.9 million in Q1 2026), the price-to-sales (PS) ratio is the primary valuation metric. The trailing PS ratio is 8.09, while the forward PS ratio is not directly provided but can be estimated using estimated revenue of $3.23 billion, yielding a forward PS of approximately 3.19. The gap between trailing and forward PS implies the market expects significant revenue growth, which is consistent with the company's 36% YoY growth. Compared to the healthcare information services industry, Tempus AI's PS ratio of 8.09 is at a premium to the sector average (industry average PS not provided, but typically lower for mature companies). The premium may be justified by its high revenue growth and AI-driven platform. Historically, Tempus AI's PS ratio has ranged from 21.25 (Q4 2020) to 130.37 (Q3 2021), with the current 8.09 near the lower end of its historical range. This suggests the stock is trading at a discount to its own history, potentially indicating a value opportunity if growth continues, or reflecting fundamental deterioration if growth slows.
PE
-41.9x
Latest Quarter
vs. Historical
N/A
5-Year PE Range 17x~59x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
-49.5x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: Tempus AI's primary financial risk is its persistent unprofitability and cash burn. The company reported a net loss of $125.9 million in Q1 2026 and negative free cash flow of $81.5 million, with trailing twelve-month free cash flow at -$216.5 million. With a debt-to-equity ratio of 2.70, the company carries significant leverage, and interest expense of $14.3 million per quarter adds to the burden. If revenue growth decelerates or margins fail to improve, the company may need to raise additional capital, diluting existing shareholders. The negative ROE of -49.9% underscores the substantial shareholder losses being incurred.
Market & Competitive Risks: The stock's beta of 3.462 makes it highly sensitive to market downturns, and its 13.5% annual decline versus the S&P 500's 18.4% gain highlights its vulnerability in risk-off environments. The healthcare information services industry is competitive, with larger players like Illumina and Guardant Health, and Tempus's premium PS ratio of 8.09 (though below its historical average) could compress if growth slows. Recent news of a rotation out of tech stocks into defensives (June 4, 2026) underscores macro risk. Additionally, the wide analyst target range ($35-$100) reflects high uncertainty about competitive positioning and market share.
Worst-Case Scenario: In a worst-case scenario, revenue growth decelerates below 20% due to competitive losses or regulatory hurdles, margins fail to improve, and the company requires dilutive financing. The stock could fall to the analyst low target of $35.00, representing a 33% decline from the current price of $52.47. This aligns with the 52-week low of $41.73, which would be a 20% drop. Given the high beta and negative free cash flow, a severe market downturn could push the stock even lower, potentially testing the $35 level.