Tempus AI
TEM
$69.97
+1.63%
Tempus AI, Inc. operates at the intersection of healthcare and artificial intelligence, building a technology platform that frees genomic and clinical data from silos and an operating system that renders that data actionable for providers, researchers, and pharmaceutical partners. Its Intelligent Diagnostics business applies AI, including generative AI, to make laboratory tests more accurate, tailored, and personal, positioning the company as a data-driven disruptor in the medical healthcare information services industry rather than a traditional diagnostics lab. The current investor narrative is dominated by the pending Personalis acquisition, which bulls argue could transform Tempus's precision medicine franchise and which drove a sharp August 2026 rally in the shares. At the same time, debate persists around the company's persistent GAAP losses, heavy stock-based compensation, and whether its AI-driven revenue growth can translate into durable profitability, with the stock still down materially over the trailing year despite a strong recent rebound.…
TEM
Tempus AI
$69.97
Related headlines
Investment Opinion: Should I buy TEM Today?
The synthesized recommendation is Hold, reflecting a balanced view of Tempus AI's high-growth potential against its persistent losses and rich valuation. The analyst consensus is Buy with a mean recommendation of 2.16 and an average target price of $67.59, implying 14.5% upside from the current $59.01, but the wide target range of $35 to $100 signals substantial disagreement and high uncertainty. The core thesis is that Tempus is a legitimate AI-driven disruptor in precision medicine with 36.12% revenue growth, but the stock is not yet a compelling buy until there is clearer evidence of a path to profitability and successful integration of the Personalis acquisition.
Supporting evidence for the Hold rating includes the robust revenue trajectory, with Q1 2026 revenue of $348.1 million growing 36.12% year-over-year, and a gross margin of 62.72% that is respectable for a diagnostics business. However, the net margin of -36.17% and operating margin of -22.21% show that operating expenses of $295.7 million are consuming gross profits, and free cash flow of -$216.5 million highlights the ongoing cash burn. The PS ratio of 8.09x is near the low end of its historical range (versus 23-28x in late 2025), which could be a value opportunity, but the PEG ratio of 0.60 depends entirely on forward EPS estimates that have not been validated. The current ratio of 3.13 and $521.2 million in cash provide a cushion, but debt-to-equity of 2.70 and ROE of -49.87% underscore the capital destruction.
The biggest risks that could invalidate the thesis are a failure to achieve profitability, integration missteps with the Personalis acquisition, and a broader de-rating of unprofitable AI healthcare names. The rating would upgrade to Buy if the company demonstrates operating leverage with net margins improving toward breakeven and free cash flow turning positive, or if the PS ratio compresses below 6x while revenue growth remains above 30%. Conversely, a downgrade to Sell would be warranted if revenue growth decelerates below 20%, cash burn accelerates requiring dilutive financing, or the Personalis deal fails to close or integrate successfully. Relative to its own history, the stock appears undervalued on a PS basis, but relative to peers and given the lack of earnings, it is fairly valued at best until profitability is proven.
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TEM 12-Month Price Forecast
Tempus AI presents a high-risk, high-reward profile with a neutral stance reflecting the balance between robust revenue growth and persistent unprofitability. The 36.12% year-over-year revenue growth and 62.72% gross margin demonstrate commercial traction, but the -36.17% net margin and -$216.5 million free cash flow highlight the cash burn that must be addressed. The stock's 8.09x PS ratio is near historical lows, suggesting the market has already de-rated the shares substantially, but the forward PE of 14,752.5x shows that profitability remains a distant prospect. Analyst sentiment is constructive with a Buy consensus and $67.59 average target, yet the wide target range and 3.98 short ratio indicate significant disagreement. I would upgrade to bullish if the company shows clear operating leverage and a credible path to breakeven, or downgrade to bearish if revenue growth decelerates below 20% or cash burn accelerates requiring dilutive financing.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Tempus AI's 12-month outlook, with a consensus price target around $68.18 and implied upside of -2.6% versus the current price.
Average Target
$68.18
0 analysts
Implied Upside
-2.6%
vs. current price
Analyst Count
—
covering this stock
Price Range
$35 - $100
Analyst target range
Tempus AI is covered by 17 analysts, and the consensus recommendation is Buy with a recommendation mean of 2.16, reflecting a constructive but not unanimous bullish stance. The average price target is $67.59, which implies approximately 14.5% upside from the current price of $59.01, a moderate but not dramatic expected return that suggests analysts see the stock as undervalued relative to their fair value estimates but not dramatically so. The consensus leans bullish, supported by the recent institutional ratings activity showing repeated Buy and Overweight reiterations from Needham, BTIG, HC Wainwright, TD Cowen, Guggenheim, and Morgan Stanley between February and June 2026, with no downgrades visible in the data. The consistency of these reiterations indicates that sell-side conviction has held firm through the volatility, though the absence of fresh upgrades during the August rally could mean targets are lagging the price action. The target range is exceptionally wide, spanning from a low of $35.00 to a high of $100.00, a spread of $65 or roughly 185% of the low target, which signals substantial disagreement about the company's trajectory and high uncertainty in the outlook. The high target of $100 implies roughly 69.5% upside and likely assumes successful integration of the Personalis acquisition, accelerating Diagnostics revenue, multiple expansion back toward prior premium levels, and a credible path to profitability that validates the forward EPS estimates. The low target of $35, roughly 40.7% below the current price, likely prices in margin compression, integration missteps, competitive pressure in precision oncology, continued cash burn requiring dilutive financing, or a broader de-rating of unprofitable AI healthcare names. The wide dispersion, combined with the 3.98 short ratio and 3.72 beta, means investors should expect continued volatility and recognize that the consensus target of $67.59 sits below the August spike high of $72.69, implying that even the bullish case may already be partially reflected in the recent rally.
Bulls vs Bears: TEM Investment Factors
The bull case rests on robust 36.12% revenue growth, a consensus Buy rating with 14.5% upside to the $67.59 average target, and a PS ratio of 8.09x that sits near historical lows. The bear case counters with a widening net loss of -$125.9 million, deeply negative free cash flow of -$216.5 million, and a beta of 3.72 that amplifies downside risk. Currently, the bear evidence carries more weight because profitability remains elusive and the cash burn requires either external financing or a credible path to breakeven, while the bull case depends heavily on the pending Personalis acquisition and forward EPS estimates that have not been validated. The single most important tension is whether Tempus can convert its 36% revenue growth into operating leverage before its cash cushion erodes, as this determines whether the 8.09x PS multiple is a value opportunity or a value trap. If the Personalis integration accelerates Diagnostics revenue and margins inflect, the stock could re-rate toward prior PS levels; if losses persist, further dilution or a de-rating is likely.
Bullish
- Revenue growth remains robust at 36%: Q1 2026 revenue of $348.1 million grew 36.12% year-over-year versus Q1 2025's $255.7 million, and the multi-quarter trend shows consistent expansion from $314.6 million in Q2 2025 to $367.2 million in Q4 2025. This mid-30s growth rate is impressive for a company of this scale and suggests the AI-driven diagnostics and data licensing model is gaining commercial traction.
- Analyst consensus Buy with 14.5% upside: All 17 covering analysts have a consensus recommendation of Buy (mean 2.16) with an average price target of $67.59, implying roughly 14.5% upside from the current $59.01. Repeated Buy and Overweight reiterations from Needham, BTIG, HC Wainwright, TD Cowen, Guggenheim, and Morgan Stanley between February and June 2026 show sell-side conviction has held firm through volatility.
- PS ratio near historical low at 8.09x: The price-to-sales ratio of 8.09x is well below the 23.24x seen in Q1 2026 and 28.02x in Q4 2025, placing the stock near the low end of its own historical valuation band. This compression reflects the roughly 43% decline from the 52-week high and could represent a value opportunity if fundamentals stabilize.
- Personalis acquisition could transform franchise: The pending Personalis acquisition drove a sharp August 2026 rally, with the stock spiking from $49.36 on August 18 to $72.69 on August 21, a 47% move in three sessions. Bulls argue the deal could transform Tempus's precision medicine business and accelerate Diagnostics revenue beyond the current $261.1 million quarterly run rate.
Bearish
- Net loss widened to $125.9M in Q1: Q1 2026 net income was -$125.9 million on $348.1 million of revenue, a -36.17% net margin, and the loss widened sequentially from Q4 2025's -$54.2 million and Q3 2025's -$80.0 million. The operating margin of -22.21% reflects heavy operating expenses of $295.7 million, showing scale has not yet translated into operating leverage.
- Free cash flow deeply negative at -$216.5M: Trailing free cash flow is -$216.5 million, with Q1 2026 alone burning -$81.5 million (operating cash flow -$73.3 million, capex -$8.2 million). ROE of -49.87% and ROA of -8.55% underscore the capital destruction at current profitability levels, and stock-based compensation of $52.7 million in the quarter means the company is partly funding itself through equity dilution.
- Extreme volatility with beta of 3.72: A beta of 3.724 implies the stock is roughly 3.7 times as volatile as the market, and a maximum drawdown of -59.76% underscores the severity of prior declines. A 1% market move implies a ~3.7% move in TEM, requiring careful position sizing and exposing holders to amplified macro shocks.
- Trading 43% below 52-week high: At $59.01, the stock sits 43.4% below its 52-week high of $104.32 and remains 33.53% below where it traded a year ago, lagging the S&P 500's 16.22% one-year gain by 49.75 percentage points. The burden of proof remains on the bulls to establish a durable trend reversal rather than a counter-trend bounce.
TEM Technical Analysis
Tempus AI is in a recovery phase within a broader downtrend, with the shares at $59.01 against a 52-week range of $40.77 to $104.32, meaning the stock trades at roughly 28.7% of its 52-week range and remains 33.53% below where it traded a year ago. That positioning near the lower third of the annual range reflects a stock that has been a significant underperformer, lagging the S&P 500's 16.22% one-year gain by 49.75 percentage points on a relative-strength basis. The current price sits 43.4% below the 52-week high, so while the stock is not at its lows, it is far from reclaiming prior highs, and the burden of proof remains on the bulls to establish a durable trend reversal rather than a counter-trend bounce. Recent momentum has turned decisively positive and is accelerating: the stock is up 8.06% over the past month and 23.40% over three months, both sharply ahead of SPY's -1.06% and 3.04% respective returns, producing relative strength of +9.12 and +20.36 over those windows. This creates a clear divergence with the -33.53% one-year and -5.37% year-to-date figures, suggesting the market is repricing the equity higher after a prolonged drawdown, likely catalyzed by the August news flow around the Personalis acquisition. The six-month change of +18.07% versus SPY's +15.40% confirms the inflection began mid-year, though the 3.98 short ratio indicates short sellers have not yet capitulated, leaving room for further squeeze-driven upside but also signaling lingering skepticism. Key technical levels are well defined: support rests at the 52-week low of $40.77, with secondary support around the July consolidation zone near $42-$44, while resistance sits at the 52-week high of $104.32, with intermediate resistance near the $72.69 August spike high. A breakout above $72.69 would confirm the recovery and open the path toward the prior highs, whereas a breakdown below $40.77 would signal a resumption of the primary downtrend and likely trigger momentum selling. Volatility is extreme, with a beta of 3.724 implying the stock is roughly 3.7 times as volatile as the market, and a maximum drawdown of -59.76% underscores the severity of prior declines; position sizing must account for this, as a 1% market move implies a ~3.7% move in TEM.
Beta
3.72
3.72x market volatility
Max Drawdown
-59.8%
Largest decline past year
52-Week Range
$41-$104
Price range past year
Annual Return
-19.6%
Cumulative gain past year
| Period | TEM Return | S&P 500 |
|---|---|---|
| 1m | +35.5% | -2.4% |
| 3m | +37.6% | +1.0% |
| 6m | +49.0% | +16.3% |
| 1y | -19.6% | +14.3% |
| ytd | +12.2% | +10.6% |
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TEM Fundamental Analysis
Tempus AI's revenue trajectory remains robustly growth-oriented, with Q1 2026 revenue of $348.1 million representing 36.12% year-over-year growth versus Q1 2025's $255.7 million. The multi-quarter trend shows consistent expansion: revenue climbed from $314.6 million in Q2 2025 to $334.2 million in Q3 2025 to $367.2 million in Q4 2025 before the seasonal step-down to $348.1 million in Q1 2026, and the Diagnostics segment alone contributed $261.1 million of the most recent quarter's total. This mid-30s percentage growth rate is impressive for a company of this scale and suggests the AI-driven diagnostics and data licensing model is gaining commercial traction, though investors should note that the sequential decline from Q4 to Q1 is consistent with seasonal patterns rather than demand deterioration. The growth trend supports the bull case that Tempus is a share gainer in precision medicine, but the deceleration from prior-year comparisons and the reliance on acquisitions to sustain momentum bear watching. Profitability remains the central concern: Q1 2026 net income was -$125.9 million on $348.1 million of revenue, a -36.17% net margin, and EPS of -$0.70, while gross margin was 62.72% and gross profit was $218.3 million. The net loss widened sequentially from Q4 2025's -$54.2 million and Q3 2025's -$80.0 million, and the Q1 2026 operating margin of -22.21% reflects heavy operating expenses of $295.7 million, including $45.9 million in R&D and $212.6 million in SG&A. Gross margin has been relatively stable in the low-60s across recent quarters, which is respectable for a diagnostics business, but the gap between gross profit and operating income shows that scale has not yet translated into operating leverage, and the -19.27% net margin on a trailing basis confirms the company is still burning through its gross profits. The balance sheet offers a cushion but also carries meaningful leverage: the current ratio is 3.13 and the quick ratio is 3.15, indicating ample short-term liquidity, with $521.2 million in cash at the end of Q1 2026. However, debt-to-equity stands at 2.70 and the debt ratio is 0.62, while free cash flow is deeply negative at -$216.5 million on a trailing basis and -$81.5 million in Q1 2026 alone, with operating cash flow of -$73.3 million and capital expenditures of -$8.2 million. ROE of -49.87% and ROA of -8.55% underscore the capital destruction at current profitability levels, and with stock-based compensation of $52.7 million in the quarter, the company is funding itself partly through equity dilution; the cash balance provides roughly several quarters of runway at the current burn rate, but sustained external financing or a path to breakeven will be necessary to avoid further dilution.
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?
Because Tempus AI reported negative net income of -$125.9 million in Q1 2026 and a trailing EPS of -$0.024, the PE ratio is not meaningful (trailing PE of -41.88), so the appropriate primary metric is the price-to-sales ratio, which stands at 8.09x trailing and 7.84x on an EV-to-sales basis. The forward PE of 14,752.5x is effectively meaningless as a valuation anchor but does signal that the market expects a dramatic swing to profitability, with consensus estimated EPS of $1.2405 for the forward period; the enormous gap between trailing losses and forward profits implies the market is pricing in an inflection that has not yet materialized in reported results. Investors should treat the PS ratio as the cleanest gauge of what the market is paying for Tempus's revenue base, and at 8.09x sales, the stock is priced for substantial growth execution. Relative to the broader healthcare information services sector, Tempus's 8.09x PS and 20.94x price-to-book are rich multiples that reflect its AI and precision medicine positioning rather than current profitability, and the negative EV/EBITDA of -92.93x and negative price-to-cash-flow of -47.18x confirm that cash-flow-based valuation metrics are unusable at present. The PEG ratio of 0.60 is the one metric that screens attractively, suggesting that when growth is factored in, the valuation is not stretched relative to expected earnings expansion, though this depends entirely on the reliability of forward estimates. The premium embedded in the PS multiple is justified only if Tempus sustains 30%+ revenue growth and delivers on the margin expansion implied by consensus; any slowdown would likely compress the multiple sharply given the absence of earnings support. Historically, Tempus's PS ratio has been extremely volatile, ranging from 23.24x in Q1 2026 and 28.02x in Q4 2025 down to 8.09x currently, placing the stock near the low end of its own historical valuation band. This compression reflects the roughly 43% decline from the 52-week high and suggests the market has already de-rated the stock substantially, which could represent a value opportunity if fundamentals stabilize or a warning if growth is deteriorating. The current 8.09x PS is well below the 23-28x levels seen as recently as late 2025, indicating that the recent rally has not yet restored the premium multiple, and the stock would need to roughly triple to return to those prior PS levels at constant revenue.
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
-92.9x
Enterprise Value Multiple
Investment Risk Disclosure
Tempus AI faces significant financial and operational risks stemming from its persistent losses and cash burn. Q1 2026 net income was -$125.9 million on $348.1 million of revenue, a -36.17% net margin, and the loss widened sequentially from -$54.2 million in Q4 2025. Free cash flow is deeply negative at -$216.5 million on a trailing basis, with Q1 2026 alone burning -$81.5 million, while stock-based compensation of $52.7 million dilutes existing shareholders. The debt-to-equity ratio of 2.70 and debt ratio of 0.62 add leverage risk, and with $521.2 million in cash, the company has roughly several quarters of runway at the current burn rate, making sustained external financing or a path to breakeven essential to avoid further dilution. Additionally, revenue concentration in the Diagnostics segment, which contributed $261.1 million of the $348.1 million quarterly total, means any competitive or reimbursement pressure in that line could disproportionately impact results.
Market and competitive risks are amplified by the stock's extreme volatility and premium valuation. The beta of 3.724 means TEM is roughly 3.7 times as volatile as the market, so a 1% market move implies a ~3.7% move in the shares, and sector rotation out of unprofitable AI healthcare names could trigger sharp declines. The PS ratio of 8.09x and price-to-book of 20.94x are rich multiples relative to the broader healthcare information services sector, justified only if Tempus sustains 30%+ revenue growth and delivers margin expansion; any slowdown would likely compress the multiple sharply given the absence of earnings support. Recent news highlights the pending Personalis acquisition as a key catalyst, but integration missteps or regulatory hurdles could derail the thesis, and competitive threats from other AI-driven oncology platforms, such as Pathos AI's acquisition of DeuterOncology, underscore the intensifying landscape. The short ratio of 3.98 indicates lingering skepticism and leaves room for squeeze-driven upside, but also signals that bears have not capitulated.
In a worst-case scenario, a combination of decelerating revenue growth, widening losses, and a failed or dilutive Personalis integration could trigger a resumption of the primary downtrend. The stock could retest its 52-week low of $40.77, which represents a decline of approximately 30.9% from the current price of $59.01, and the analyst low target of $35.00 implies a 40.7% downside. A broader de-rating of unprofitable AI healthcare names, similar to the -59.76% maximum drawdown already experienced, could push the shares even lower if cash burn forces a dilutive equity raise. In this adverse scenario, an investor could lose 31% to 41% from the current price, with the downside potentially exceeding 50% if market conditions deteriorate sharply and the company's cash position erodes faster than expected.
FAQ
The most severe risk is financial: Tempus reported a Q1 2026 net loss of -$125.9 million and free cash flow of -$216.5 million, with a debt-to-equity ratio of 2.70, meaning continued cash burn could force dilutive financing. Second is competitive risk, as the AI-driven oncology space is intensifying, exemplified by Pathos AI's acquisition of DeuterOncology, which could pressure Tempus's market share and pricing. Third is macro and market risk, with a beta of 3.724 making the stock highly sensitive to sector rotation out of unprofitable growth names, and a maximum drawdown of -59.76% showing the potential severity of a sell-off. Fourth is company-specific execution risk around the pending Personalis acquisition, which drove the August rally but could disappoint if integration costs exceed expectations or regulatory hurdles emerge. These risks are ranked from most to least severe, with the financial and execution risks being the most immediate threats to the investment thesis.
The 12-month forecast for Tempus AI is divided into three scenarios. The base case, with a 50% probability, targets a range of $60 to $75, assuming revenue growth remains above 30% and the stock trades around the analyst average target of $67.59. The bull case, with a 25% probability, targets $85 to $100, driven by successful Personalis integration and a credible path to profitability that validates the forward EPS estimate. The bear case, with a 25% probability, targets $35 to $45, assuming revenue growth decelerates below 20%, cash burn accelerates, and the stock retests its 52-week low of $40.77. The most likely scenario is the base case, with the key assumption being that Tempus maintains its growth trajectory without a major dilutive event, allowing the market to gradually re-rate the stock as profitability milestones are achieved.
Tempus AI is difficult to value on traditional metrics because it has negative earnings, with a trailing PE of -41.88 and a forward PE of 14,752.5x that is effectively meaningless. The most relevant metric is the price-to-sales ratio of 8.09x, which is near the low end of its historical range of 8x to 28x, suggesting the stock is undervalued relative to its own history. However, compared to the broader healthcare information services sector, the 8.09x PS and 20.94x price-to-book are rich multiples that reflect its AI positioning rather than current profitability. The market is pricing in a dramatic swing to profitability, as evidenced by the consensus forward EPS of $1.2405, and the PEG ratio of 0.60 screens attractively if those estimates are reliable. If growth decelerates or profitability remains elusive, the multiple could compress further, making the stock fairly valued at best.
Tempus AI is a high-risk, high-reward proposition that is not a straightforward buy at the current price of $59.01. The analyst consensus is Buy with an average target of $67.59, implying 14.5% upside, but the stock trades at 8.09x sales with a -36.17% net margin and -$216.5 million free cash flow, meaning profitability is unproven. The biggest downside risk is a retest of the 52-week low of $40.77, which would represent a 30.9% decline, and the analyst low target of $35 implies 40.7% downside. For risk-tolerant investors with a long-term horizon and a small position size, the potential from the Personalis acquisition and 36.12% revenue growth could justify a speculative buy, but conservative investors should wait for evidence of operating leverage and a path to breakeven before committing capital.
Tempus AI is more suitable for long-term investment than short-term trading, but only for investors who can tolerate extreme volatility and have a multi-year horizon. The company is in a high-growth phase with 36.12% revenue growth, but it is not yet profitable, and the beta of 3.724 means short-term price swings can be violent, with a maximum drawdown of -59.76%. There is no dividend (payout ratio of 0), so returns depend entirely on capital appreciation, and earnings visibility is low given the unproven path to profitability. A suggested minimum holding period is three to five years to allow for the Personalis integration to bear fruit and for operating leverage to materialize. Short-term traders may find opportunities around earnings or acquisition news, but the risk of sharp reversals is high, and the 3.98 short ratio indicates potential for squeezes in either direction.