Analyst Ryan MacDonald from Needham reiterated a Buy rating on Tempus AI, Inc. Class A (TEM – Research Report) and increased the price target to $70.00 from $56.00.
Ryan MacDonald has given his Buy rating due to a combination of factors, including Tempus AI, Inc.’s recent performance and future growth prospects. The company slightly exceeded expectations in the fourth quarter and provided a favorable outlook for fiscal year 2025, which has led to an increase in the price target to $70.
The acquisition of Ambry is expected to contribute significantly to Tempus’s growth, with the core business projected to grow by approximately 30% and Ambry adding mid-to-high teens growth. This combination is anticipated to result in positive adjusted EBITDA for the combined entity in FY25, a year earlier than previously expected. Despite a recent decline in stock price, MacDonald sees this as a buying opportunity due to the strong visibility in the data business and potential for growth in the genomics sector, particularly with reimbursement expansions that could drive further upside in 2025.
In another report released yesterday, TD Cowen also maintained a Buy rating on the stock with a $74.00 price target.