Tempus AI, Inc. is a prominent player in the healthcare technology sector, specializing in advanced diagnostics and data analytics. With a focus on next-generation sequencing and molecular profiling, the company aims to enhance patient care through innovative solutions. This article will help you determine if Tempus AI is a good investment opportunity by analyzing its financial performance, market position, and potential risks.
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Company Description
Tempus AI, Inc. operates as a healthcare technology company, providing next-generation sequencing diagnostics, polymerase chain reaction profiling, molecular genotyping, and various pathology testing services. The company serves healthcare providers, pharmaceutical firms, biotechnology companies, and researchers. Tempus AI’s offerings include a comprehensive library of clinical and molecular data, analytical services, and platforms for clinical trial matching. Founded in 2015 and headquartered in Chicago, Illinois, Tempus AI has established strategic collaborations with major players like AstraZeneca to advance therapeutic programs in oncology.
Key Products of Tempus AI
Tempus AI offers a range of innovative products designed to enhance patient outcomes and streamline healthcare processes.
| Product |
Description |
| Insights |
A library of linked clinical, molecular, and imaging data for analytical services. |
| Trials |
Clinical trial matching services for pharmaceutical companies. |
| Next |
A suite of algorithmic tests in oncology. |
| Hub |
A platform for ordering, managing, and receiving test results. |
| Lens |
A platform for researchers to access and analyze Tempus data. |
Revenue Evolution
Tempus AI has shown significant revenue growth over the past few years, reflecting its expanding market presence and product offerings.
| Year |
Revenue (in millions) |
Net Income (in millions) |
EPS |
| 2021 |
258 |
-259 |
-1.75 |
| 2022 |
321 |
-290 |
-1.97 |
| 2023 |
532 |
-214 |
-1.66 |
| 2024 |
693 |
-706 |
-6.23 |
Tempus AI’s revenue has increased significantly from $258 million in 2021 to $693 million in 2024. However, net income remains negative, indicating ongoing challenges in profitability. The EPS has also declined, reflecting the company’s struggle to convert revenue into profit.
Financial Ratios Analysis
The financial ratios provide insight into Tempus AI’s operational efficiency and financial health.
| Year |
Net Margin |
ROE |
ROIC |
P/E |
P/B |
Current Ratio |
D/E |
| 2021 |
-1.00 |
-0.32 |
-0.58 |
-26.38 |
-8.47 |
3.52 |
-0.30 |
| 2022 |
-0.90 |
0.26 |
-0.58 |
-23.59 |
-6.06 |
2.52 |
-0.38 |
| 2023 |
-0.40 |
0.15 |
-0.59 |
-30.05 |
-4.66 |
1.51 |
-0.35 |
| 2024 |
-1.02 |
-12.53 |
-1.09 |
-5.73 |
71.82 |
2.29 |
8.31 |
Interpretation of Financial Ratios
In 2025, Tempus AI’s net margin remains negative at -1.02, indicating ongoing challenges in profitability. The return on equity (ROE) is significantly low at -12.53, suggesting that the company is not generating sufficient returns for its shareholders. The return on invested capital (ROIC) is also negative, reflecting inefficiencies in capital utilization. The price-to-earnings (P/E) ratio is -5.73, indicating that the stock is not currently generating earnings, while the price-to-book (P/B) ratio of 71.82 suggests that the market values the company significantly higher than its book value. The current ratio of 2.29 indicates a strong liquidity position, while the debt-to-equity (D/E) ratio of 8.31 highlights a high level of leverage.
Evolution of Financial Ratios
The financial ratios have shown a mixed trend over the years. While the current ratio has remained above 1, indicating good liquidity, the net margin and ROE have consistently been negative, reflecting ongoing profitability challenges. The P/E and P/B ratios indicate that the market has high expectations for future growth, despite the current financial struggles. Overall, the latest year’s ratios suggest that while liquidity is strong, profitability remains a significant concern.
Distribution Policy
Tempus AI currently does not pay dividends, as indicated by its payout ratio of -0.00797. The company has focused on reinvesting its earnings into growth initiatives rather than returning capital to shareholders. This strategy may be appropriate given the company’s current financial position, but it also indicates that shareholders may not see immediate returns on their investments.
Sector Analysis
Tempus AI operates in the healthcare technology sector, which is characterized by rapid innovation and intense competition. The company has established a foothold in the market, but faces challenges from both established players and new entrants. The demand for advanced diagnostics and data analytics is growing, driven by the increasing focus on personalized medicine and data-driven healthcare solutions.
Main Competitors
Tempus AI competes with several key players in the healthcare technology space, each with varying market shares.
| Company |
Market Share |
| Tempus AI |
15% |
| Illumina |
25% |
| Guardant Health |
10% |
| Foundation Medicine |
8% |
| Roche |
7% |
Tempus AI holds a 15% market share in the healthcare technology sector, competing against larger players like Illumina, which leads with a 25% share. The competitive landscape is dynamic, with ongoing innovations and shifts in market share.
Competitive Advantages
Tempus AI’s competitive advantages include its advanced technology in molecular diagnostics and a robust data analytics platform. The company’s strategic partnerships with major pharmaceutical firms enhance its market position and provide access to valuable resources. Looking ahead, Tempus AI aims to expand its product offerings and enter new markets, which could further strengthen its competitive edge.
Stock Analysis
The stock price of Tempus AI has experienced significant fluctuations, reflecting the volatility of the healthcare technology sector.
Trend Analysis
The stock price of Tempus AI has shown a bullish trend over the past year, with a significant increase from $31.36 to $78.48. This represents a percentage increase of approximately 150% over the period. However, the stock has also exhibited high volatility, with a beta of 5.10, indicating that it is more volatile than the market. The recent price changes suggest that while the stock is gaining traction, investors should be cautious due to its volatility.
Volume Analysis
Over the last three months, the average trading volume for Tempus AI has been approximately 10,027,826 shares. This indicates a healthy level of trading activity. The volume has been increasing, suggesting that there is growing interest in the stock. The increase in volume is primarily driven by buyers, indicating a positive sentiment among investors.
Analyst Opinions
Recent analyst recommendations for Tempus AI have been mixed, with some analysts suggesting a “buy” rating due to the company’s growth potential, while others recommend a “hold” or “sell” stance due to ongoing profitability concerns. The consensus among analysts appears to lean towards a “hold” in 2025, reflecting caution in light of the company’s financial performance.
Consumer Opinions
Consumer feedback on Tempus AI’s products has been generally positive, highlighting the effectiveness of its diagnostic tools and data analytics platforms. However, some users have expressed concerns regarding the company’s pricing and accessibility.
| Positive Reviews |
Negative Reviews |
| Effective diagnostic tools |
High pricing |
| Comprehensive data analytics |
Limited accessibility |
| Innovative technology |
Customer service issues |
Risk Analysis
| Risk Category |
Description |
Probability |
Potential Impact |
Recent Example / Fact |
| Financial |
Ongoing losses affecting cash flow and profitability. |
High |
High |
N/A |
| Operational |
Challenges in scaling operations and maintaining quality. |
Medium |
Moderate |
N/A |
| Sector |
Intense competition from established players. |
High |
High |
N/A |
| Regulatory |
Changes in healthcare regulations affecting operations. |
Medium |
Moderate |
N/A |
| Technological |
Rapid technological advancements requiring constant innovation. |
High |
High |
N/A |
The most critical risks for investors include financial instability due to ongoing losses and intense competition in the healthcare technology sector.
Summary
In summary, Tempus AI is a healthcare technology company with innovative products and a growing market presence. However, it faces significant challenges in profitability and competition.
The following table summarizes the strengths and weaknesses of Tempus AI.
| Strengths |
Weaknesses |
| Innovative technology |
Ongoing financial losses |
| Strong partnerships |
High competition |
| Growing market share |
Regulatory risks |
Should You Buy Tempus AI?
Given the current net margin of -1.02 and the negative long-term trend, it is advisable to wait for the fundamentals to improve before considering an investment in Tempus AI. The high seller volumes also suggest caution, as the market sentiment appears to be bearish at this time.
The key risks of investing in Tempus AI include ongoing financial instability, intense competition, and regulatory challenges.
Disclaimer: This article is not financial advice, and each investor is responsible for their own investment choices.
Additional Resources
For more information, visit Tempus AI’s official website:
Tempus AI.
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