Tempus AI, Inc.: Mixed Signals Prompt Hold Rating Amid Revenue Growth and Cash Flow Concerns

William Blair analyst Andrew Brackmann has maintained their neutral stance on TEM stock, giving a Hold rating today.

Andrew Brackmann has given his Hold rating due to a combination of factors surrounding Tempus AI, Inc.’s recent performance and financial outlook. The company’s first-quarter results slightly exceeded expectations in terms of total revenue and adjusted EBITDA, prompting a modest increase in full-year revenue guidance. However, the core business performance was mixed, with some areas outperforming, such as Ambry, while others, like oncology volumes, fell short of consensus estimates.
Despite the revenue growth, the company’s cash flow from operations was negative, attributed to timing issues and one-time events, though management expects cash flows to stabilize. The company’s cash reserves appear sufficient for the short term, reducing immediate concerns about the need for additional capital. These mixed signals, including both positive revenue adjustments and challenges in core areas, underpin Brackmann’s decision to maintain a Hold rating on the stock.

Brackmann covers the Healthcare sector, focusing on stocks such as NeoGenomics, Guardant Health, and Exagen. According to TipRanks, Brackmann has an average return of -3.6% and a 27.27% success rate on recommended stocks.

In another report released today, Piper Sandler also maintained a Hold rating on the stock with a $55.00 price target.