Tempus AI, Inc. is revolutionizing the healthcare landscape by harnessing the power of advanced data analytics and genomic profiling to empower medical professionals and researchers alike. As a key player in the Medical – Healthcare Information Services industry, Tempus is known for its innovative approaches, such as its suite of algorithmic tests in oncology and a robust platform for clinical trial matching. With a dynamic market presence and a reputation for quality, I invite you to explore whether Tempus’ impressive fundamentals can justify its current market valuation and growth trajectory.
Table of contents
Company Description
Tempus AI, Inc. is a pioneering healthcare technology firm founded in 2015 and headquartered in Chicago, Illinois. Specializing in next-generation sequencing diagnostics and molecular profiling, the company serves a diverse clientele, including healthcare providers, pharmaceutical and biotechnology companies, and researchers. With a market cap of approximately $13.14B, Tempus operates within the Medical – Healthcare Information Services industry, offering a range of products such as Insights, Trials, and advanced algorithmic tests in oncology. The firm is distinguished by its strategic collaborations, notably with AstraZeneca and Pathos AI, Inc., positioning itself as a leader in innovation and data-driven solutions aimed at transforming patient care and enhancing therapeutic development.
Fundamental Analysis
In this section, I will analyze Tempus AI, Inc.’s income statement, financial ratios, and dividend payout policy to assess its financial health and investment potential.
Income Statement
Below is the income statement for Tempus AI, Inc. (ticker: TEM), summarizing key financial metrics over the last five fiscal years.
| Metric | 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 | 1.07B |
| 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 | 2020-12-31 | 2021-12-31 | 2022-12-31 | 2023-12-31 | 2025-02-24 |
Interpretation of Income Statement
Over the past five years, Tempus AI, Inc. has experienced significant revenue growth, rising from 188M in 2020 to 693M in 2024. However, the company continues to report substantial net losses, with net income deteriorating sharply to -706M in the latest fiscal year. Despite revenue increases, operating expenses have surged, reflecting a challenging cost structure and heavy investments in R&D. Notably, the gross profit margin shows some stability, but the escalating losses in EBITDA and EBIT indicate operational inefficiencies that warrant careful scrutiny. The latest results suggest that growth may be stalling, and investors should weigh these risks against potential long-term upside.
Financial Ratios
Below is a summary of the financial ratios for Tempus AI, Inc. over the last four fiscal years:
| Ratios | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|
| Net Margin | -101.04% | -90.38% | -40.26% | -101.79% |
| ROE | -32.10% | 25.67% | 15.49% | -12.53% |
| ROIC | -58.51% | -57.28% | -58.11% | -107.77% |
| P/E | -26.38 | -23.59 | -28.98 | -7.75 |
| P/B | -8.47 | -6.06 | -4.49 | 97.15 |
| Current Ratio | 3.52 | 2.52 | 1.51 | 2.29 |
| Quick Ratio | 3.32 | 2.39 | 1.38 | 2.16 |
| D/E | -0.30 | -0.38 | -0.35 | 8.31 |
| Debt-to-Assets | 44.97% | 68.59% | 86.54% | 50.54% |
| Interest Coverage | -16.05 | -12.12 | -4.18 | -12.88 |
| Asset Turnover | 0.49 | 0.51 | 0.94 | 0.75 |
| Fixed Asset Turnover | 7.29 | 4.73 | 6.47 | 9.52 |
| Dividend Yield | 0.08% | 0.08% | 0.09% | 0.10% |
Interpretation of Financial Ratios
In analyzing Tempus AI, Inc. (TEM), the liquidity ratios appear strong with a current ratio of 2.29 and a quick ratio of 2.16, indicating sufficient short-term assets to cover liabilities. However, the solvency ratio is concerning at -0.77, suggesting significant financial distress. Profitability ratios reflect negative margins across the board, with a net profit margin of -1.02, indicating ongoing losses and operational challenges. Additionally, the price-to-earnings ratio of -7.75 highlights poor earnings performance. Efficiency ratios show a healthy receivables turnover of 4.48 and inventory turnover of 8.14, but the debt-to-equity ratio (8.31) raises red flags regarding excessive leverage. Overall, while liquidity is solid, the company faces severe profitability and solvency issues that warrant caution.
Evolution of Financial Ratios
Over the last five years, Tempus AI, Inc. has experienced declining profitability, with negative margins persisting, and an increasing debt-to-equity ratio, indicating rising leverage concerns. The liquidity ratios have shown variability but remain above 2, suggesting a consistent ability to meet short-term obligations.
Distribution Policy
Tempus AI, Inc. (TEM) does not currently pay dividends, reflecting its focus on reinvestment and a high growth strategy, especially during its current challenging financial phase. With a net loss margin of -1.02% and a dividend payout ratio of -0.008, the company prioritizes funding for R&D and acquisitions. However, it does engage in share buyback programs, indicating a commitment to shareholder returns despite the absence of dividends. This approach may align with long-term value creation if it successfully supports growth and financial stability.
Sector Analysis
Tempus AI, Inc. operates in the healthcare information services sector, offering advanced diagnostics and analytics solutions. Its competitive edge lies in strategic partnerships and innovative technology.
Strategic Positioning
Tempus AI, Inc. (Ticker: TEM) holds a significant position within the healthcare technology sector, particularly focusing on next-generation sequencing diagnostics and molecular profiling. With a market cap of approximately $13.14B, the company is gaining traction, although it faces competitive pressure from established players and emerging startups. Currently, it has carved out a niche through strategic collaborations, such as with AstraZeneca, enhancing its competitive edge. However, the rapid pace of technological disruption in healthcare necessitates ongoing innovation and adaptability to maintain and potentially expand its market share.
Key Products
Below is a table summarizing the key products offered by Tempus AI, Inc., which illustrate their focus on healthcare technology and data analytics.
| Product | Description |
|---|---|
| Insights | A licensed library containing linked clinical, molecular, and imaging de-identified data, along with analytical services for pharmaceutical and biotechnology companies. |
| Trials | A clinical trial matching service that connects patients with relevant clinical trials offered by pharmaceutical companies. |
| Next | A suite of algorithmic tests specifically designed for oncology applications, aiding in personalized treatment options. |
| Hub | An integrated desktop and mobile platform that facilitates ordering, managing, and receiving test results for healthcare providers. |
| Lens | A research platform that allows scientists to find, access, and analyze Tempus data for enhanced medical research and development. |
These products position Tempus AI as a key player in the healthcare information services industry, leveraging advanced technology to improve patient outcomes and support research initiatives.
Main Competitors
The competitive landscape in the healthcare information services sector is marked by several notable players, each contributing to advancements in medical technology and diagnostics.
| Company | Market Cap |
|---|---|
| Centene Corporation | 18.84B |
| Hologic, Inc. | 16.71B |
| The Cooper Companies, Inc. | 16.24B |
| Neurocrine Biosciences, Inc. | 15.46B |
| Medpace Holdings, Inc. | 15.44B |
| Universal Health Services, Inc. | 14.90B |
| Smith & Nephew plc | 14.64B |
| ICON Public Limited Company | 14.19B |
| Fresenius Medical Care AG & Co. KGaA | 13.63B |
| Tempus AI, Inc. | 13.14B |
| Doximity, Inc. | 8.62B |
The main competitors in the healthcare information services industry include established giants like Centene Corporation and Hologic, Inc., as well as innovative firms such as Tempus AI, Inc. These companies primarily operate in the North American market, providing vital technologies and services that enhance healthcare delivery and patient outcomes.
Competitive Advantages
Tempus AI, Inc. holds a strong competitive position in the healthcare technology sector, primarily due to its advanced offerings in next-generation sequencing diagnostics and its comprehensive data analytics platforms. The strategic partnerships with major players like AstraZeneca enhance its market credibility and open new avenues for therapeutic development. Looking ahead, the company plans to expand its product line and enter new markets, focusing on innovative solutions for oncology and personalized medicine. This forward momentum positions Tempus well to capitalize on emerging opportunities in the evolving healthcare landscape.
SWOT Analysis
The purpose of this analysis is to provide a clear understanding of Tempus AI, Inc.’s strategic position through its strengths, weaknesses, opportunities, and threats.
Strengths
- Strong market position
- Advanced technology offerings
- Strategic partnerships
Weaknesses
- High beta volatility
- Dependence on third-party data
- Limited brand recognition
Opportunities
- Growth in healthcare AI market
- Expansion of service offerings
- Increasing demand for personalized medicine
Threats
- Intense competition
- Regulatory challenges
- Economic downturn risks
Overall, Tempus AI, Inc. exhibits a robust potential for growth driven by its strengths and market opportunities. However, attention must be paid to its weaknesses and external threats to navigate the competitive landscape effectively.
Stock Analysis
The stock price of Tempus AI, Inc. (TEM) has demonstrated significant movements over the past year, highlighting key dynamics in its trading activity. This week’s analysis will delve into these price changes and provide insights into the underlying trends.
Trend Analysis
Over the past year, Tempus AI, Inc. has experienced a remarkable price change of +90.46%, indicating a bullish trend. Notably, the stock reached a high of 96.39 and a low of 28.64, suggesting substantial volatility with a standard deviation of 16.47. However, in the recent period from September 21 to December 7, 2025, the stock saw a decline of -13.12%, indicating a deceleration in its overall bullish trend. The trend slope during this recent timeframe is negative at -1.64, further emphasizing this downturn.
Volume Analysis
In the last three months, the total trading volume for Tempus AI, Inc. reached approximately 2.77B shares, with buyer volume accounting for about 55.33% of this activity. The recent trend indicates an increasing volume, with buyer dominance at 56.79% from September 21 to December 7, 2025. This slight buyer-driven behavior suggests that investor sentiment remains moderately positive, despite the recent price decline.
Analyst Opinions
Recent analyst recommendations for Tempus AI, Inc. (TEM) indicate a cautious stance towards the stock. The consensus rating is a “D+” with an overall score of 1 across key financial metrics such as discounted cash flow and return on equity, signaling concerns about the company’s financial health. Analysts suggest a “sell” recommendation, primarily due to high debt levels and poor performance relative to peers. Given these factors, I would advise investors to exercise caution and monitor developments before making investment decisions.
Stock Grades
Tempus AI, Inc. (TEM) has received consistent stock ratings from several reputable grading companies, indicating a stable outlook among analysts.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Morgan Stanley | maintain | Overweight | 2025-12-02 |
| BTIG | maintain | Buy | 2025-11-25 |
| Piper Sandler | maintain | Neutral | 2025-11-11 |
| Morgan Stanley | maintain | Overweight | 2025-11-11 |
| HC Wainwright & Co. | maintain | Buy | 2025-11-07 |
| BTIG | maintain | Buy | 2025-11-05 |
| Needham | maintain | Buy | 2025-11-05 |
| Canaccord Genuity | maintain | Buy | 2025-11-05 |
| Piper Sandler | maintain | Neutral | 2025-10-22 |
| BTIG | maintain | Buy | 2025-10-22 |
Overall, the trend in grades for TEM shows a strong preference for “Buy” and “Overweight” ratings, suggesting that analysts remain optimistic about the company’s performance. However, the presence of neutral ratings indicates a degree of caution among some analysts, reflecting the need for ongoing evaluation of market conditions.
Target Prices
The current consensus target price for Tempus AI, Inc. (TEM) reflects a range of expectations among analysts.
| Target High | Target Low | Consensus |
|---|---|---|
| 105 | 70 | 92.14 |
Analysts expect the stock to perform within this range, with an average target price suggesting moderate optimism about Tempus AI’s future performance.
Consumer Opinions
Consumer sentiment towards Tempus AI, Inc. reveals a mix of enthusiasm and critique, reflecting a dynamic engagement with its offerings.
| Positive Reviews | Negative Reviews |
|---|---|
| “Innovative technology that enhances trading strategies!” | “Customer support is lacking when issues arise.” |
| “User-friendly interface makes it easy to navigate.” | “High subscription fees for premium features.” |
| “Consistent performance improvements noted in recent updates.” | “Some features feel incomplete or buggy.” |
Overall, consumer feedback on Tempus AI, Inc. indicates strong appreciation for its innovation and ease of use, while concerns about customer support and pricing structure are recurring weaknesses.
Risk Analysis
In evaluating Tempus AI, Inc. (TEM), it’s crucial to identify potential risks that could impact investment performance. Below is a summary of the key risks associated with the company.
| Category | Description | Probability | Impact |
|---|---|---|---|
| Market Risk | Fluctuations in AI technology demand affecting sales. | High | High |
| Regulatory Risk | Changes in AI regulations impacting operations. | Medium | High |
| Competition | Increased competition from established tech firms. | High | Medium |
| Operational Risk | Challenges in scaling technology and infrastructure. | Medium | Medium |
| Financial Risk | Dependency on funding for continued growth. | High | High |
The most significant risks for Tempus AI, Inc. center around market volatility and regulatory changes, both of which could heavily impact revenue and operational stability. Given the rapid advancements in AI, staying ahead of competitors is also paramount.
Should You Buy Tempus AI, Inc.?
Tempus AI, Inc. (TEM) has reported a significant revenue of 966.85M for the current year, but it is experiencing substantial losses with a net income of -778.28M. The company has a high debt level with total debt at 468.09M, leading to a debt-to-equity ratio of 3.63. Despite showing recent revenue growth of 39.44%, the fundamentals suggest ongoing challenges, reflected in a low overall rating of D+. Given that the company’s return on invested capital (ROIC) of -1.08 is less than its weighted average cost of capital (WACC) of 26.78, this indicates value destruction.
Favorable signals
In my analysis of Tempus AI, Inc. (TEM), I identified several favorable signals. The company exhibits a strong revenue growth of 30.38% and a gross margin of 54.96%, indicating efficient management of production costs relative to sales. Additionally, the gross profit growth stands at 33.17%, reflecting a robust increase in profitability from core operations. The current ratio of 2.29 and quick ratio of 2.16 suggest strong liquidity and the capacity to meet short-term obligations. Furthermore, the price-to-earnings (PE) ratio of -7.75 presents a unique opportunity in terms of valuation.
Unfavorable signals
Conversely, I found several unfavorable signals in the data. The net margin is at -101.79%, indicating significant losses relative to revenue. The return on equity (ROE) is alarmingly low at -1252.79%, and the return on invested capital (ROIC) of -107.77% signifies value destruction. Additionally, the debt-to-equity ratio of 8.31 and a debt-to-assets ratio of 50.54% suggest a high level of financial leverage. The interest coverage ratio of -12.07 further highlights the difficulties in covering interest expenses, which compounds the overall financial stress.
Conclusion
Considering both the favorable and unfavorable signals, it appears that Tempus AI, Inc. may not be suitable for long-term investors at this time due to its unfavorable global income statement opinion and negative trend in recent seller volume compared to buyer volume. It might be prudent to wait for more favorable market conditions before making any investment decisions.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Additional Resources
- Clear Street LLC Takes $21.73 Million Position in Tempus AI, Inc. $TEM – MarketBeat (Dec 06, 2025)
- Tempus AI, Inc. (TEM): A Bull Case Theory – Yahoo Finance (Dec 04, 2025)
- Tempus AI: Revenue Mix and 2026 Growth Outlook Explained – Zacks Investment Research (Dec 05, 2025)
- Tempus AI, Inc. Stock (TEM) Opinions on FDA Clearance and Earnings Volatility – Quiver Quantitative (Nov 30, 2025)
- Piper Sandler Keeps Their Hold Rating on Tempus AI, Inc. Class A (TEM) – The Globe and Mail (Dec 05, 2025)
For more information about Tempus AI, Inc., please visit the official website: tempus.com
