Cathie Wood’s portfolio features plenty of names operating at the cutting edge, and Tempus AI (NASDAQ:TEM) has all the attributes of a classic Wood play. The company is working to bring precision medicine to life by developing what it calls Intelligent Diagnostics.
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The idea is simple but powerful: use artificial intelligence – including generative AI – to make lab tests smarter, more accurate, and more personal. Instead of looking at results in isolation, Tempus connects them to a patient’s own clinical data, creating a clearer, more tailored picture. The company’s key breakthrough was recognizing that every lab test, whether genomic or otherwise, becomes far more meaningful when seen in the context of an individual’s unique profile. With this approach, Tempus aims to help doctors select therapies and guide treatment so that each patient can move forward on a care path designed specifically for them.
Having created the largest collection of clinical and molecular data in the world, Forbes has even dubbed the company the “Google of healthcare data.”
Meanwhile, the company has just been granted FDA approval for an updated version of its Tempus Pixel platform, a cardiac imaging tool that applies advanced AI to produce very precise images of a patient’s heart.
Buoyed by strong quarterly results and consecutive increases to its revenue outlook for the year, investors have evidently warmed to the story and have sent the shares up by 150% on a year-to-date basis.
But Maybe Wood has been thinking those gains are quite enough for now. Over the past 2 months, via her ARKK and ARKG ETFs, Wood has sold $18.83 million-worth of TEM shares.
That cautious stance is one mirrored in Stifel analyst Daniel Arias’ stance. Arias has nice things to say about the company but is wary of getting on board right now.
“Tempus is a high-quality Dx asset, with both established and emerging product offerings and significant market share in fast-growing areas,” the analyst said. “However, valuation now sits above key comps despite more questions about Data growth and the decision to add a structurally slower growing business inorganically (Ambry) and a slowing Data business.”
As such, while Arias still sees TEM as a “strong Dx player with a differentiated Data offering,” he finds the current valuation a turn off.
Bottom line, Arias rates TEM shares a Hold (i.e., Neutral), while his $65 price target factors in a 12-month slide of 25%. (To watch Arias’s track record, click here)
The Street’s average target is a more forgiving $73.30, but that figure still sits ~14% below the current share price. On the rating front, TEM claims a Moderate Buy consensus rating, based on a mix of 6 Buys and 5 Holds. Given the discrepancy between rating and price target, watch out for any model tweaking from the Street’s analysts shortly. (See TEM stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.