Tempus AI, Inc. Class A (TEM) AI Stock Analysis

• Market Cap: $7.09B
• Dividend Yield: N/A
• Average Volume (3M): 9.99M
• Price to Earnings (P/E): ―
• Beta (1Y): 3.44
• Revenue Growth: 30.38%
• EPS Growth: -195.58%
• Country: US
• Employees: 2,400
• Sector: General
• Sector Strength: N/A
• Industry: Medical - Diagnostics & Research
• EPS (TTM): -4.75
• Shares Outstanding: 167,989,070
• 10 Day Avg. Volume: 9,873,953
• 30 Day Avg. Volume: 9,986,023
• PEG Ratio: N/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 Ratio: 35.30
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $62.33
• Price Target Upside: 52.10% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10

Tempus AI's overall score of 47 reflects a company with promising growth prospects but significant financial and valuation challenges. The financial performance is hampered by profitability and stability concerns, impacting the overall score heavily. Technical indicators suggest bearish momentum, while the valuation remains unattractive. However, the positive earnings call provides a promising outlook, highlighting strategic growth and profitability potential in the future.

Positive Factors

Acquisition

The acquisition of Ambry Genetics by Tempus was seen positively as it paid just ~2x sales, was EBITDA-accretive, and helped achieve significant revenue milestones.

Product Performance

Recent checks with medical oncologists reveal significant value in Tempus' technology platform and product suite, with positive feedback on its diversified product offering and early adoption of its AI platform.

Revenue Growth

Tempus has achieved $1 billion of revenue faster than any other precision oncology lab company, and aims to achieve positive Adj. EBITDA later in 2025, which is regarded as a key catalyst for the stock.

Negative Factors

Growth Outlook

Shares are off roughly 10% in aftermarket trading as the guidance is a bit more back-half weighted than some expected and there were questions on the data businesses’ long-term growth outlook.

Market Expectations

The stock was down aftermarket likely due to high expectations and less margin for error.

Stock Performance

Investors may be underwhelmed by the magnitude of the beat and raise, as evidenced by the stock being down ~13% in premarket.

Tempus AI, Inc. Class A Business Overview & Revenue Model

Company Description

Tempus AI, Inc operates as a healthcare technology company. It engages in providing next generation sequencing diagnostics, polymerase chain reaction profiling, molecular genotyping, and other anatomic and molecular pathology testing to healthcare providers, pharmaceutical companies, biotechnology companies, researchers, and other third parties. The company also offers Insights, a license library of linked clinical, molecular, and imaging de-identified data, as well as a suite of analytical services to analytic and cloud-and-compute tools to pharmaceutical and biotechnology companies; and Trials that provides clinical trial matching services to pharmaceutical companies. In addition, it operates Next; Algos, a suite of algorithmic tests in oncology; Hub, a desktop and mobile platform for ordering, managing, and receiving tests and patient results; and Lens, a platform for researchers and scientists to find, access, and analyze Tempus data. The company was formerly known as Tempus Labs, Inc. and changed its name to Tempus AI, Inc in January 2023. Tempus AI, Inc was incorporated in 2015 and is headquartered in Chicago, Illinois.

How the Company Makes Money

Tempus 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.

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.

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.

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 Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 40.98
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TEM, the sentiment is Negative. The current price of 40.98 is below the 20-day moving average (MA) of 45.96, below the 50-day MA of 54.26, and below the 200-day MA of 49.63, indicating a bearish trend. The MACD of -3.13 indicates Positive momentum. The RSI at 41.99 is Neutral, neither overbought nor oversold. The STOCH value of 47.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TEM.

Tempus AI, Inc. Class A Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
QGEN	72 Outperform	$8.75B	108.96	2.27%	―	0.66%	-75.89%
NTRA	68 Neutral	$20.02B	―	-19.42%	―	56.75%	59.77%
Sector *	55 Neutral	$3.80B	-11.38	-15.29%	5.24%	19.55%	-44.95%
ILMN	51 Neutral	$11.39B	―	-30.11%	―	-2.93%	-4.69%
EXAS	50 Neutral	$7.72B	―	-37.09%	―	10.37%	-389.98%
GH	50 Neutral	$5.55B	―	-4584.47%	―	31.04%	16.91%
TEM	47 Neutral	$7.09B	―	-1252.79%	―	30.38%	-195.58%

Tempus AI, Inc. Class A Corporate Events

Tempus AI Reports Strong Q4 2024 Financial Growth

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.