Tempus AI
TEM
$44.16
-7.03%
Tempus AI, Inc. is a technology company operating in the healthcare information services industry, focused on building an AI-powered platform to organize and analyze clinical and molecular data to advance precision medicine. The company positions itself as a disruptor in the healthcare data space, leveraging its proprietary Tempus Platform and generative AI to make laboratory diagnostics more accurate and personalized. The current investor narrative centers on the company's rapid growth trajectory and its path to profitability, with recent financial results showing significant revenue expansion but ongoing losses, fueling debate about its long-term valuation as a high-growth, pre-profitability AI healthcare play.…
TEM
Tempus AI
$44.16
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 $57.41 and implied upside of +30.0% versus the current price.
Average Target
$57.41
5 analysts
Implied Upside
+30.0%
vs. current price
Analyst Count
5
covering this stock
Price Range
$35 - $57
Analyst target range
Analyst coverage for TEM is limited but consistently bullish, with 5 analysts providing estimates and recent institutional ratings showing a strong Buy bias, including actions from Guggenheim, Needham, and Morgan Stanley maintaining Buy or Overweight ratings. The consensus implies significant upside, with an average revenue estimate of $3.18 billion for the forward period, though a specific average price target is not provided in the data, preventing a precise upside calculation; the maintained bullish stance by several firms in March 2026 suggests analysts see the recent price weakness as a buying opportunity. The estimated revenue range is from $3.09 billion to $3.31 billion, indicating a relatively tight spread of about 7% around the consensus, which signals stronger conviction in the near-term revenue trajectory; the high target likely assumes successful execution on growth and margin improvement, while the low target may factor in continued competitive and funding challenges.
Bulls vs Bears: TEM Investment Factors
The evidence currently tilts bearish, driven by severe technical deterioration, unsustainable cash burn, and deep unprofitability that outweighs the compelling revenue growth story. The bear case is reinforced by the stock's 48% six-month decline, high short interest, and its position near 52-week lows. However, the bull case is not without merit, anchored by explosive top-line expansion, rapidly improving gross margins, and analyst conviction. The single most important tension in the investment debate is the timing and certainty of the path to profitability. Bulls believe gross margin expansion (to 89.74% in Q4) will soon translate to operating leverage and positive cash flow, justifying the current sales multiple. Bears see the -$404M TTM FCF burn and 1.66 debt-to-equity ratio as a fundamental threat that could force dilutive financing or a growth slowdown before profitability is achieved. The resolution of this cash burn versus growth trajectory dilemma will determine the stock's direction.
Bullish
- Explosive Revenue Growth: Q4 2025 revenue grew 82.98% year-over-year to $367.2 million, demonstrating the company's strong market traction. This follows an even more dramatic 829.8% YoY growth for the period ending December 2025, indicating a massive scaling of the business.
- Gross margin expanded significantly from 60.6% in Q1 2025 to 89.74% in Q4 2025, showcasing the scalability and potential profitability of the core platform. This 69.64% trailing gross margin provides a strong foundation for future operating leverage as revenue scales.
- Analyst Conviction on Growth: Analysts maintain a strong Buy bias with a tight revenue estimate range of $3.09B to $3.31B around a $3.18B consensus for the forward period. This high conviction, with a spread of only 7%, signals confidence in the near-term revenue trajectory despite the stock's price weakness.
- Compressed Valuation Creates Opportunity: The trailing Price-to-Sales ratio has compressed dramatically from 28.02x to 8.09x, placing it near the lower end of its recent historical range. With a forward PS of approximately 3.24x based on consensus revenue, the market has significantly de-rated the stock, potentially pricing in excessive pessimism.
Bearish
- Severe Technical Downtrend & Sentiment: The stock is down 48.30% over 6 months and trades at just 45% of its 52-week range ($36.22-$104.32), reflecting intense negative momentum. A high short ratio of 4.48 and a -58.96% max drawdown underscore pervasive bearish sentiment and elevated volatility.
- Unsustainable Cash Burn: Trailing twelve-month free cash flow is deeply negative at -$404.0 million, indicating the company is burning cash rapidly to fund growth. With a debt-to-equity ratio of 1.66, this reliance on external financing poses a significant risk if capital markets tighten or growth falters.
- Deep Unprofitability Despite Growth: The company reported a Q4 2025 net income of -$54.2 million, with a trailing net margin of -19.27%. While revenue grows, the path to profitability remains uncertain, with a forward P/E of -758.8 highlighting the market's skepticism about near-term earnings.
- Growth Deceleration Risk: While Q4 YoY growth was 82.98%, this marks a significant sequential deceleration from the 829.8% growth cited for the period ending December 2025. This moderation suggests the explosive early-stage growth phase may be ending, raising questions about sustainable high growth rates.
TEM Technical Analysis
The stock is in a pronounced and sustained downtrend, with a 1-year price change of -5.01% and a more severe 6-month decline of -48.30%. As of the latest close of $47.39, the price is trading at approximately 45% of its 52-week range ($36.22 to $104.32), positioning it much closer to its 52-week low than its high, which suggests a potential value opportunity but also reflects significant negative momentum and investor pessimism. Recent momentum remains negative and is accelerating the longer-term downtrend, with the stock down 24.01% over the past 3 months and 7.80% over the past month; this persistent selling pressure, coupled with a 1-month relative strength of -3.52 against the SPY, indicates the stock is underperforming the market even during a weak period for the broader index. Key technical support is clearly defined at the 52-week low of $36.22, while resistance lies at the 52-week high of $104.32; a breakdown below $36.22 would signal a new phase of weakness, while any sustained move above the recent trading range would require a significant catalyst. The stock's high short ratio of 4.48 and a maximum drawdown of -58.96% highlight its elevated volatility and the bearish sentiment currently surrounding it.
Beta
—
—
Max Drawdown
-59.0%
Largest decline past year
52-Week Range
$36-$104
Price range past year
Annual Return
+0.8%
Cumulative gain past year
| Period | TEM Return | S&P 500 |
|---|---|---|
| 1m | -13.2% | +0.4% |
| 3m | -33.4% | -2.0% |
| 6m | -54.2% | +4.1% |
| 1y | +0.8% | +23.9% |
| ytd | -29.2% | -0.3% |
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TEM Fundamental Analysis
Revenue growth is exceptionally strong but shows signs of sequential deceleration; Q4 2025 revenue was $367.2 million, representing a year-over-year growth rate of 82.98%, yet this marks a slowdown from the 829.8% YoY growth cited for the period ending December 2025, indicating the explosive growth phase may be moderating as the company scales. The company is deeply unprofitable, with a Q4 2025 net income of -$54.2 million and a trailing net margin of -19.27%, although the gross margin of 69.64% is robust and improved significantly from 60.6% in Q1 2025 to 89.74% in Q4 2025, suggesting the core business model can be profitable if operating leverage is achieved. The balance sheet shows a strong current ratio of 3.13, indicating good short-term liquidity, but financial health is pressured by significant cash burn, with trailing twelve-month free cash flow of -$404.0 million and a debt-to-equity ratio of 1.66, meaning the company is reliant on external financing to fund its growth as it moves toward an eventual path to profitability.
Quarterly Revenue
$367211000.0B
2025-12
Revenue YoY Growth
+0.82%
YoY Comparison
Gross Margin
+0.89%
Latest Quarter
Free Cash Flow
$-403985000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
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Valuation Analysis: Is TEM Overvalued?
Given the company's negative net income, the primary valuation metric selected is the Price-to-Sales (PS) ratio. The trailing PS ratio is 8.09x, while the forward PS, implied by a market cap of $10.29 billion and estimated revenue of $3.18 billion, is approximately 3.24x; this wide gap suggests the market is pricing in significant revenue growth and future margin expansion. Compared to sector averages, specific industry comps are not provided in the data, but the PS ratio of 8.09x for a company growing revenue over 80% YoY could be considered elevated for healthcare services, though potentially justified if the AI-platform narrative commands a premium for disruptive growth. Historically, the stock's own PS ratio has compressed dramatically from 28.02x at the end of Q4 2025 to the current 8.09x, placing it near the lower end of its recent historical range and suggesting the market has significantly de-rated the stock's sales multiple amid the broader price decline, which may indicate either a value opportunity or a reassessment of its growth sustainability.
PE
-42.0x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range -105x~0x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
-47.2x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks are acute, centered on cash sustainability and profitability. The company burned -$404 million in free cash flow over the trailing twelve months while carrying a debt-to-equity ratio of 1.66, indicating heavy reliance on external capital. Revenue growth, while strong at 82.98% YoY in Q4, shows signs of sequential deceleration from hyper-growth levels, raising execution risk. The net margin of -19.27% underscores that significant operating leverage is still required, and any stumble in scaling could prolong losses and strain the balance sheet further.
Market & Competitive Risks include extreme valuation compression and sector-specific headwinds. The stock's PS ratio has collapsed from 28.02x to 8.09x, reflecting a severe de-rating that could continue if growth moderates. As a healthcare AI disruptor, TEM faces competition from both established diagnostic firms and other tech entrants, with its premium valuation (forward PS ~3.24x) vulnerable if it loses its growth premium. The stock's high volatility (max drawdown -58.96%) and severe underperformance vs. the SPY (-27.21% over 1 year) indicate it is out of favor and sensitive to broader risk-off sentiment in growth stocks.
Worst-Case Scenario involves a 'growth stall' coupled with a funding crisis. Specifically, revenue growth decelerates sharply to below 50% YoY, gross margins fail to hold above 80%, and the -$404M annual cash burn persists. In this environment, accessing additional debt or equity financing becomes prohibitively expensive or dilutive, forcing drastic cost-cutting that cripples growth initiatives. This could trigger a downward spiral of missed estimates, analyst downgrades, and a loss of investor confidence in the platform narrative. The realistic downside in this scenario is a re-test and break below the 52-week low of $36.22, representing a potential loss of approximately -24% from the current price of $47.39.