TD Cowen analyst Daniel Brennan downgraded the rating on Tempus AI, Inc. Class A to a Hold today, setting a price target of $88.00.
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Daniel Brennan has given his Hold rating due to a combination of factors including the strong performance of Tempus AI, Inc. Class A’s stock, which has seen a significant increase in value. The stock’s valuation has become more balanced, with its EV/S multiple rising significantly despite minimal fundamental changes. This has led to a reassessment of the risk-reward profile, prompting a downgrade from a Buy to a Hold rating.
In addition, while Tempus AI’s business model remains robust, particularly with its high-margin Insights segment and growing Algos business, the current valuation at 11.1x EV/NTM sales suggests that the stock is now more appropriately valued. This valuation adjustment, alongside the company’s strong positioning and growth relative to its peers, has resulted in an increased price target but a more cautious outlook, hence the Hold recommendation.
According to TipRanks, Brennan is a 5-star analyst with an average return of 18.0% and a 56.54% success rate. Brennan covers the Healthcare sector, focusing on stocks such as Guardant Health, Agilent, and Bruker.