Every day, Tempus AI, Inc. is at the forefront of transforming healthcare through cutting-edge technology that enhances diagnostics and treatment personalization. As a leader in the Medical – Healthcare Information Services sector, Tempus specializes in advanced genomic and molecular testing, creating a significant impact on patient outcomes and drug development. With a reputation for innovation and quality, I now ponder whether the fundamentals of Tempus still align with its current market valuation and growth trajectory.
Table of contents
Company Description
Tempus AI, Inc. is a leading healthcare technology company founded in 2015 and headquartered in Chicago, IL. Specializing in next-generation sequencing diagnostics, molecular genotyping, and pathology testing, Tempus serves a diverse clientele, including healthcare providers, pharmaceutical firms, and researchers. With a market cap of $11.54B, the company has made significant strides in the Medical – Healthcare Information Services industry. Its product suite encompasses Insights, Trials, and various platforms for data analysis and clinical trial matching. By fostering strategic collaborations, such as with AstraZeneca, Tempus is poised to shape the future of oncology through innovation and data-driven insights, reinforcing its role as a vital player in healthcare advancement.
Fundamental Analysis
In this section, I will conduct a fundamental analysis of Tempus AI, Inc., focusing on the income statement, financial ratios, and dividend payout policy.
Income Statement
The following table summarizes the income statement of Tempus AI, Inc. (ticker: TEM) for the last five fiscal years, providing insights into revenue, expenses, and net income.
| Item | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Revenue | 188M | 258M | 321M | 532M | 693M |
| Cost of Revenue | 159M | 174M | 190M | 246M | 312M |
| Operating Expenses | 222M | 327M | 396M | 482M | 1B |
| Gross Profit | 28M | 84M | 130M | 286M | 381M |
| EBITDA | -169M | -220M | -237M | -133M | -610M |
| EBIT | -192M | -243M | -267M | -167M | -648M |
| Interest Expense | 19M | 15M | 22M | 47M | 54M |
| Net Income | -210M | -259M | -290M | -214M | -706M |
| EPS | -1.49 | -1.75 | -1.97 | -1.73 | -4.60 |
| Filing Date | 2021-02-24 | 2022-02-24 | 2023-02-24 | 2024-02-24 | 2025-02-24 |
In reviewing Tempus AI’s income statement, I observe a steady increase in revenue from 188M in 2020 to 693M in 2024, indicating strong growth momentum. However, despite higher revenues, net income significantly declined, reaching -706M in 2024 from -214M in 2023, driven by escalating operating expenses that soared to 1B. Additionally, EBITDA worsened, reflecting deeper operational challenges. The company must prioritize cost management to improve margins and overall profitability moving forward.
Financial Ratios
The following table presents the financial ratios for Tempus AI, Inc. (TEM) over the last available years, allowing for a clear comparison of performance metrics.
| Ratios | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Net Margin | -1.116 | -1.005 | -0.904 | -0.403 | -1.018 |
| ROE | 0.409 | 0.321 | 0.257 | 0.155 | -12.528 |
| ROIC | -0.297 | -0.584 | -0.573 | -0.581 | -1.067 |
| WACC | – | – | – | – | – |
| P/E | -32.58 | -26.38 | -23.59 | -30.05 | -5.73 |
| P/B | -13.33 | -8.47 | -6.06 | -4.66 | 71.82 |
| Current Ratio | 6.409 | 3.519 | 2.517 | 1.506 | 2.294 |
| Quick Ratio | 6.038 | 3.319 | 2.390 | 1.382 | 2.162 |
| D/E | -0.490 | -0.296 | -0.384 | -0.353 | 8.309 |
| Debt-to-Assets | 0.334 | 0.450 | 0.686 | 0.865 | 0.505 |
| Interest Coverage | -10.220 | -16.051 | -12.124 | -4.184 | -12.881 |
| Asset Turnover | 0.250 | 0.485 | 0.508 | 0.943 | 0.749 |
| Fixed Asset Turnover | 4.891 | 7.285 | 4.731 | 6.469 | 9.522 |
| Dividend Yield | 0.001 | 0.001 | 0.001 | 0.001 | 0.001 |
Interpretation of Financial Ratios
In 2024, Tempus AI’s financial ratios indicate a concerning trend, particularly with a negative net margin of -1.018 and a return on equity (ROE) of -12.528. The high price-to-book ratio (71.82) suggests overvaluation, while a debt-to-equity ratio of 8.309 raises red flags regarding financial leverage and potential insolvency risks. These factors collectively point to significant financial strain.
Evolution of Financial Ratios
Over the past five years, Tempus AI has shown a deteriorating trend in its financial ratios. The net margin has worsened from -1.116 in 2020 to -1.018 in 2024, while the current ratio has decreased from a healthy 6.409 in 2020 to 2.294 in 2024, indicating declining liquidity and increasing financial risk.
Distribution Policy
Tempus AI, Inc. (TEM) does not currently pay dividends, primarily due to its negative net income and a focus on reinvesting in high-growth opportunities. This strategy is common among companies in their growth phase, prioritizing R&D and acquisitions to drive long-term shareholder value. Additionally, TEM engages in share buybacks, which can signal confidence in their future prospects. However, the absence of dividends raises questions about immediate shareholder returns. Overall, this approach may support sustainable value creation if effectively managed.
Sector Analysis
Tempus AI, Inc. operates in the healthcare information services sector, leveraging advanced diagnostics and analytics to support healthcare providers and pharmaceutical companies in oncology. Its competitive advantages include proprietary data analytics and strategic partnerships with industry leaders.
Strategic Positioning
Tempus AI, Inc. commands a notable position in the medical healthcare information services sector with a market capitalization of approximately $11.54B. The company primarily excels in next-generation sequencing diagnostics and molecular profiling, holding a competitive market share bolstered by strategic collaborations, including partnerships with AstraZeneca. However, it faces significant competitive pressure from established players and emerging technologies that could potentially disrupt its market. With a beta of 4.87, the stock exhibits high volatility, indicating the need for cautious investment strategies.
Key Products
Tempus AI, Inc. offers a variety of innovative products that leverage advanced technology to enhance healthcare services. Below is a summary of their key products:
| Product | Description |
|---|---|
| Insights | A licensed library that provides linked clinical, molecular, and imaging de-identified data, along with analytical services for pharmaceutical and biotechnology companies. |
| Trials | A clinical trial matching service that helps pharmaceutical companies identify appropriate trials for their patients. |
| Next | A platform that integrates a suite of algorithmic tests specifically designed for oncology diagnostics. |
| Algos | A collection of advanced algorithmic testing solutions aimed at improving the precision of cancer treatment options. |
| Hub | A user-friendly desktop and mobile platform for healthcare providers to order, manage, and receive test results efficiently. |
| Lens | A research-focused platform that allows scientists to access and analyze comprehensive Tempus data for better decision-making in clinical studies. |
These products reflect Tempus AI’s commitment to advancing healthcare through technology and data-driven insights.
Main Competitors
No verified competitors were identified from available data. However, Tempus AI, Inc. operates in the Medical – Healthcare Information Services sector and has an estimated market share that reflects its innovative offerings in sequencing diagnostics and molecular profiling. As a company focused on advanced healthcare technology, Tempus is strategically positioned to lead in its niche, particularly in the U.S. market, where it serves a range of healthcare providers and pharmaceutical companies.
Competitive Advantages
Tempus AI, Inc. stands out in the healthcare technology sector through its advanced diagnostics and analytics capabilities. The company’s proprietary platforms, such as Insights and Hub, provide healthcare providers and pharmaceutical companies with valuable data and tools for improved decision-making. Strategic collaborations, particularly with AstraZeneca, position Tempus to explore innovative therapeutic programs in oncology. Looking ahead, the company is focused on expanding its product offerings and entering new markets, which could significantly enhance its growth potential and solidify its leadership in the healthcare information services industry.
SWOT Analysis
This analysis evaluates Tempus AI, Inc. to identify its strengths, weaknesses, opportunities, and threats, guiding strategic decision-making.
Strengths
- Innovative technology
- Strong partnerships
- Diverse service offerings
Weaknesses
- High beta volatility
- Limited dividend history
- Competitive market
Opportunities
- Growing demand in healthcare tech
- Expansion into new markets
- Strategic collaborations
Threats
- Regulatory challenges
- Intense competition
- Economic downturns
Overall, Tempus AI, Inc. possesses significant strengths and opportunities that could drive growth, but must navigate its weaknesses and external threats carefully to ensure long-term success. Strategic focus on innovation and partnerships will be crucial in this rapidly evolving industry.
Stock Analysis
Over the past year, Tempus AI, Inc. (TEM) has demonstrated significant price movements, characterized by a notable bullish trend, despite recent fluctuations in its stock price.
Trend Analysis
Analyzing the stock’s performance over the last year, I see a remarkable percentage change of +67.06%. This indicates a strong bullish trend, although the recent trend shows a decline of -15.55% from September 7, 2025, to November 23, 2025. The highest price reached during this timeframe was 96.39, while the lowest was 28.64, suggesting some volatility, with a standard deviation of 16.37 indicating moderate price swings. The overall trend shows signs of deceleration, reflecting a potential shift in momentum.
Volume Analysis
In the last three months, the total trading volume for TEM has reached approximately 2.72B, with buyer volume at 1.49B and seller volume at 1.23B, indicating a buyer-driven market with a buyer dominance percentage of 54.74%. The volume trend is increasing, which suggests positive investor sentiment and heightened market participation, particularly in recent weeks where buyer dominance has risen to 61.63%. This trend reinforces the potential for sustained interest in the stock.
Analyst Opinions
Recent analyst recommendations for Tempus AI, Inc. (TEM) indicate a cautious stance, with a consensus rating of “D+” from analysts. The overall score is low at 1 across critical financial metrics, including discounted cash flow and return on equity. This suggests significant concerns regarding the company’s financial health and performance. Analysts recommend a “sell” position, primarily due to unsatisfactory debt-to-equity ratios and weak earnings potential. I advise investors to approach this stock with caution, considering the current negative sentiment in the market.
Stock Grades
The latest stock ratings for Tempus AI, Inc. (TEM) indicate a stable outlook from various reputable grading companies.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Piper Sandler | maintain | Neutral | 2025-11-11 |
| Morgan Stanley | maintain | Overweight | 2025-11-11 |
| HC Wainwright & Co. | maintain | Buy | 2025-11-07 |
| Canaccord Genuity | maintain | Buy | 2025-11-05 |
| BTIG | maintain | Buy | 2025-11-05 |
| Needham | maintain | Buy | 2025-11-05 |
| Piper Sandler | maintain | Neutral | 2025-10-22 |
| BTIG | maintain | Buy | 2025-10-22 |
| Guggenheim | maintain | Buy | 2025-09-26 |
| HC Wainwright & Co. | maintain | Buy | 2025-09-12 |
Overall, the trend shows a consistent rating of “Buy” from several firms, while Piper Sandler has maintained a “Neutral” perspective. This indicates a generally positive sentiment towards TEM, with some analysts favoring a cautious approach.
Target Prices
The consensus target prices for Tempus AI, Inc. reflect a moderate outlook among analysts.
| Target High | Target Low | Consensus |
|---|---|---|
| 105 | 60 | 85.83 |
Overall, analysts expect Tempus AI, Inc. to have a target price around 85.83, suggesting a balanced view between potential upside and downside risks.
Consumer Opinions
Consumer sentiment about Tempus AI, Inc. (TEM) reveals a mix of enthusiasm and concerns among its user base.
| Positive Reviews | Negative Reviews |
|---|---|
| “The AI technology is revolutionary!” | “Customer service needs improvement.” |
| “Innovative solutions that save time.” | “Pricing is too high for small businesses.” |
| “User-friendly interface and easy to use.” | “Occasional bugs in the software.” |
Overall, consumers appreciate the innovative technology and ease of use offered by Tempus AI, while they express dissatisfaction with customer service and pricing, particularly for smaller enterprises.
Risk Analysis
In today’s dynamic market, understanding the potential risks associated with Tempus AI, Inc. (TEM) is crucial for informed investment decisions. Below is a summary of key risks to consider:
| Category | Description | Probability | Impact |
|---|---|---|---|
| Market Risk | Fluctuations in AI market demand affecting revenue. | High | High |
| Regulatory Risk | Changes in AI regulations impacting operations. | Medium | High |
| Competitive Risk | Increased competition from other tech firms. | High | Medium |
| Operational Risk | Potential disruptions in technology development. | Medium | Medium |
| Financial Risk | Volatility in funding and investment sources. | High | High |
Given the evolving landscape of AI technology, market and regulatory risks stand out as the most probable and impactful factors for TEM. Staying informed on these risks will enhance your portfolio management strategy.
Should You Buy Tempus AI, Inc.?
Tempus AI, Inc. has experienced a negative net margin of -1.02, indicating unprofitable operations. The company carries a substantial debt level with a debt-to-equity ratio of 8.31, which suggests significant leverage. Overall, the fundamentals show a deteriorating trend, as reflected in the company’s rating of D+.
A. Favorable signals There are no favorable signals based on the current data.
B. Unfavorable signals The negative net margin of -1.02 suggests unprofitability. The company’s ROIC is -1.07, which indicates value destruction, as it is lower than the WACC of 26.08. The long-term trend, although bullish, has recently shown a decline of -15.55%. Additionally, recent seller volume exceeds buyer volume, indicating a lack of buying support.
C. Conclusion Given the negative net margin, the ongoing value destruction, and the recent seller dominance, it might be prudent to wait for more favorable market conditions before considering an investment in Tempus AI, Inc.
The high level of debt and the negative trends raise concerns about the company’s financial stability.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Additional Resources
- Tempus to Participate in the Piper Sandler 37th Annual Healthcare Conference – Business Wire (Nov 18, 2025)
- Bank of New York Mellon Corp Acquires 171,776 Shares of Tempus AI, Inc. $TEM – MarketBeat (Nov 18, 2025)
- Tempus AI: Great Buying Opportunity On Recent Weakness (NASDAQ:TEM) – Seeking Alpha (Nov 13, 2025)
- Tempus AI, Inc. Stock (TEM) Opinions on FDA Clearance and Earnings Report – Quiver Quantitative (Nov 14, 2025)
- How Did Tempus AI Power Its Move to Positive EBITDA in Q3? – Yahoo Finance (Nov 17, 2025)
For more information about Tempus AI, Inc., please visit the official website: tempus.com
