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Tempus AI, Inc. Class A (TEM)
:TEM
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Tempus AI, Inc. Class A
(NASDAQ:TEM)
50Neutral
Positive Factors
Business Performance
The company's clinical oncology business showed strong performance with revenue increasing by 35% and volumes growing by 23%.
Profitability Outlook
Tempus is now expecting to reach EBITDA profitability a year ahead of prior expectations, which is viewed positively given the challenges digital health companies face in achieving profitability.
Strategic Acquisition
The acquisition of Ambry is expected to contribute mid-to-high teens growth, leading to positive adj. EBITDA for the combined business in FY25.
Negative Factors
Growth Concerns
Ambry's slower long-term revenue growth is dilutive to TEM's standalone long-term growth rate.
Market Reaction
Investors may be underwhelmed by the magnitude of the beat and raise, as evidenced by the stock being down ~13% in premarket.
Revenue Expectations
Preliminary Q4 results were slightly below expectations, which may have caused some concern among investors.
Tempus AI, Inc. Class A (TEM) vs. S&P 500 (SPY)
Market Cap
$8.84B
Dividend YieldN/A
Average Volume (3M)14.97M
Price to Earnings (P/E)―
Beta (1Y)5.44
Revenue Growth30.38%
EPS Growth-195.58%
CountryUS
Employees2,400
SectorGeneral
Sector StrengthN/A
IndustryMedical - Diagnostics & Research
Share Statistics
EPS (TTM)-4.75
Shares Outstanding167,168,910
10 Day Avg. Volume10,633,214
30 Day Avg. Volume14,967,988
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)27.06
Price to Cash Flow (P/CF)45.40
P/FCF Ratio35.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$64.13Price Target Upside8.69% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
Tempus AI, Inc. Class A Business Overview & Revenue Model
Company DescriptionTempus AI, Inc. Class A (TEM) is a technology company specializing in artificial intelligence and machine learning solutions. The company operates in the tech sector, focusing on developing advanced AI platforms and tools that cater to a wide range of industries, including healthcare, finance, and retail. Tempus AI's core products include predictive analytics software, AI-driven automation systems, and data management solutions, aimed at enhancing operational efficiency and decision-making for its clients.
How the Company Makes MoneyTempus AI, Inc. generates revenue primarily through the sale of its software products and solutions, offering both subscription-based and licensing models. The company also earns money by providing consulting services, helping clients integrate and optimize AI technologies within their existing systems. Key revenue streams include software licensing fees, recurring subscription fees, and consulting service charges. Additionally, strategic partnerships with major technology firms and industry-specific collaborations enhance its market reach and contribute to its earnings.
Tempus AI, Inc. Class A Financial Statement Overview
Summary
Tempus AI, Inc. has shown significant revenue growth but struggles with profitability, high leverage, and negative cash flows. These financial challenges indicate a need for improved cost control and operational efficiency.Income Statement
Tempus AI, Inc. has shown impressive revenue growth over the years, with a notable increase from $62.1 million in 2019 to $693.4 million in 2024. However, despite the revenue uptick, the company continues to face significant challenges in managing profitability. The net profit margin remains negative due to persistent losses, and both EBIT and EBITDA margins reflect substantial operating losses. This indicates that while revenue generation is strong, cost management and operational efficiency need significant improvement.45
Neutral
Balance Sheet
The balance sheet reveals a concerning financial structure, with high total liabilities of $869.8 million against a minimal stockholders' equity of $56.3 million in 2024, leading to an unfavorable debt-to-equity ratio. The equity ratio is extremely low, indicating heavy reliance on debt financing. Although the company has managed to maintain a reasonable level of cash and short-term investments, the negative stockholders' equity in recent years signals financial instability and potential solvency risks.30
Negative
Cash Flow
Operating cash flows are consistently negative, reflecting challenges in generating cash from core operations. Free cash flow has shown volatility, with significant negative figures, indicating that the company is struggling to cover its capital expenditures from its operations. Although there is a positive trend in financing cash flows, suggesting successful capital raising efforts, the heavy reliance on external financing poses a risk if such inflows are not sustainable.40
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 693.40M | 531.82M | 320.67M | 257.85M | 188.00M |
| Gross Profit | ||||
| 381.11M | 286.18M | 121.68M | 77.39M | 22.83M |
| EBIT | ||||
| -691.08M | -196.08M | -269.14M | -243.98M | -193.93M |
| EBITDA | ||||
| -610.42M | -133.33M | -236.85M | -219.52M | -169.37M |
| Net Income Common Stockholders | ||||
| -705.81M | -214.12M | -289.81M | -259.19M | -209.85M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 448.26M | 197.57M | 302.94M | 277.69M | 513.44M |
| Total Assets | ||||
| 926.12M | 564.05M | 631.36M | 531.35M | 751.92M |
| Total Debt | ||||
| 468.09M | 488.14M | 433.03M | 238.95M | 251.45M |
| Net Debt | ||||
| 127.14M | 322.38M | 130.09M | -38.74M | -261.99M |
| Total Liabilities | ||||
| 869.78M | 1.95B | 734.25M | 440.55M | 405.75M |
| Stockholders Equity | ||||
| 56.34M | -1.38B | -102.88M | 90.80M | 346.17M |
| Cash Flow | Free Cash Flow | |||
| -211.17M | -248.95M | -186.58M | -223.75M | -219.98M |
| Operating Cash Flow | ||||
| -189.04M | -214.34M | -168.20M | -211.98M | -206.56M |
| Investing Cash Flow | ||||
| -130.39M | -40.31M | -57.94M | -21.72M | -13.42M |
| Financing Cash Flow | ||||
| 494.33M | 117.55M | 251.39M | -2.04M | 506.11M |
Tempus AI, Inc. Class A Risk Analysis
Tempus AI, Inc. Class A disclosed 97 risk factors in its most recent earnings report. Tempus AI, Inc. Class A reported the most risks in the “Tech & Innovation” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Tempus AI, Inc. Class A Peers Comparison
Overall Rating
UnderperformOutperform
Sector (55)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $2.92T | 31.66 | 34.29% | 0.80% | 15.04% | 12.38% | |
76 Outperform | $2.09T | 21.13 | 32.91% | 0.35% | 13.89% | 38.99% | |
75 Outperform | $2.94T | 41.32 | 119.18% | 0.03% | 114.20% | 146.26% | |
67 Neutral | $231.72B | 38.66 | 24.14% | 2.69% | 1.45% | -20.56% | |
55 Neutral | $4.47B | -19.66 | -4.70% | 5.70% | 27.38% | -68.17% | |
54 Neutral | $104.79B | ― | -18.31% | 2.06% | -2.08% | -1212.72% | |
50 Neutral | $8.84B | ― | -1252.79% | ― | 30.38% | -195.58% |
* General Sector Average
Performance Comparison
TEM
Tempus AI, Inc. Class A
58.57
22.09
60.55%
INTC
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24.20
-17.36
-41.77%
IBM
International Business Machines
249.90
67.53
37.03%
MSFT
Microsoft
395.16
-23.30
-5.57%
NVDA
Nvidia
120.69
28.16
30.43%
GOOG
Alphabet Class C
172.79
21.81
14.45%
Tempus AI, Inc. Class A Earnings Call Summary
Earnings Call Date: Feb 24, 2025 | % Change Since: -15.19% | Next Earnings Date: Aug 12, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong performance in revenue and gross profit growth, successful strategic acquisitions, and positive future guidance. Despite some minor challenges with data delivery timing and adjusted growth expectations for Ambry Genetics, the overall outlook remains positive with significant achievements in AI diagnostics reimbursement and strategic partnerships.Highlights
Accelerated Revenue and Gross Profit Growth
Tempus reported a 35.8% year-over-year revenue increase in Q4 2024, with gross profit growth of 49.7%.
Strong Contract Value and Retention
The year ended with $940 million in total remaining contract value and 140% net revenue retention.
Acquisition of Ambry Genetics
Tempus completed the acquisition of Ambry Genetics on February 3, 2025, which is expected to contribute positively to their financials.
Increased Revenue Guidance for 2025
Revenue guidance was increased from $1.23 billion to $1.24 billion for 2025, with an expectation to be adjusted EBITDA positive at around $5 million.
Extended Agreement with Google
Tempus extended its agreement with Google for another five years, securing favorable rates.
AI Diagnostics Reimbursement Milestone
Tempus's AI diagnostics received reimbursement, indicating a positive shift for AI-based diagnostics.
Lowlights
Delayed Data Delivery Impact
A $10 million data delivery was delayed from Q4, impacting potential revenue.
Ambry Genetics Growth Rate Adjustment
Ambry Genetics is expected to have a lower growth rate in 2025, in the high teens, due to lapping previous accelerants.
Minor Revenue Impact from In-Network Wins
Recent in-network wins with commercial payers are expected to have a limited impact on overall reimbursement uplift.
Company Guidance
During the call, Tempus provided guidance for 2025, highlighting an increase in revenue projections from $1.23 billion to $1.24 billion. The company expects to generate approximately $5 million in adjusted EBITDA, indicating a positive shift towards profitability. Key metrics from the fourth quarter of 2024 include a 35.8% year-over-year revenue growth and a 49.7% increase in gross profit. Tempus also reported a total remaining contract value of $940 million and a net revenue retention rate of 140%. The acquisition of Ambry Genetics was completed on February 3, 2025, and is expected to contribute to revenue in the first quarter. Furthermore, Tempus extended its agreement with Google for another five years, securing favorable rates. Overall, Tempus remains focused on sustaining growth and leveraging its two main businesses, Genomics and Data, while also integrating strategic acquisitions.Tempus AI, Inc. Class A Corporate Events
M&A TransactionsFinancial Disclosures
Tempus AI Reports Strong Q4 2024 Financial Growth
Positive
Feb 24, 2025
Tempus AI, Inc. reported significant financial growth for the fourth quarter and full year of 2024, with a 35.8% increase in quarterly revenue and a 49.7% rise in gross profit, driven by its data and services segment. The company completed the acquisition of Ambry Genetics and announced new agreements with major healthcare providers, positioning itself for robust revenue growth and positive Adjusted EBITDA in 2025.
Business Operations and StrategyFinancial Disclosures
Tempus AI Reports Strong 2024 Revenue Growth
Positive
Jan 13, 2025
Tempus AI, Inc. announced preliminary, unaudited financial results for the fourth quarter and full year 2024, highlighting a 30% year-over-year revenue growth to approximately $693 million and improved adjusted EBITDA. Despite some challenges in CRO revenues, the company maintained strong momentum in core businesses, with significant growth in genomics and data services expected to meet revenue and adjusted EBITDA guidance for 2024. Tempus is set to present at the J.P. Morgan Healthcare Conference and plans to report final financial results in its first earnings call of 2025.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.