We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
In the last reported quarter, the company’s adjusted loss of 18 cents was wider than the Zacks Consensus Estimate of a loss of 15 cents per share. Tempus AI, which went public in June 2024, exceeded estimates in one of the trailing three quarters and missed in two, the average negative earnings surprise being 6.46%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar).
The Zacks Consensus Estimate for revenues is currently pegged at $248.08 million for the first quarter.
The Zacks Consensus Estimate for the first-quarter bottom line has been steady at a loss of 27 cents per share over the past 90 days.
TEM's Earnings Estimate Revision Trend
Image Source: Zacks Investment Research
Throughout the first quarter of 2025, Tempus AI had an impressive run on the bourses with a 43% gain. Despite macroeconomic challenges, including escalating trade tensions that broadly impacted the healthcare technology sector, the company witnessed strong momentum, primarily driven by a series of strategic acquisitions and partnerships in the field of AI-driven precision medicine.
During this period, the company not only surpassed the 2.1% gain posted by the broader industry but also significantly outperformed the 4.9% decline of the S&P 500 benchmark index. The company has also outperformed other players in the health infotech field, like 10x Genomics (TXG - Free Report) and SOPHiA GENETICS (SOPH - Free Report) . While TXG declined 39.2%, SOPH gained 8.1% during the said period.
Q1 Price Comparison
Image Source: Zacks Investment Research
Let’s see how things have shaped up for TEM shares prior to this announcement:
Factors to Note Prior to Tempus's Q1 Earnings
This innovator in artificial intelligence-based precision medicine solutions has been attracting investors' interest since its IPO. As the market’s appetite for AI applications in healthcare is rapidly increasing, Tempus AI is emerging as a top contender in this high-growth sector. We expect the company’s cutting-edge product lines and strategic plans to prove significant in driving the company’s first-quarter results.
Balanced Segmental Numbers to Drive Growth: TEM’s Genomics unit, which reported more than 30% growth in the fourth quarter, is expected to once again report strong growth in the first quarter, banking on continued unit growth pick-up.
Data and Services revenues, which accelerated 44.6% year over year in the last reported quarter, are once again expected to have seen strong growth, primarily banking on accelerated revenue growth within Insights, the company’s data licensing business.
The acquisitions of Ambry Genetics and Deep 6 AI are expected to have contributed to Tempus AI's strategic expansion during the first quarter of 2025. The acquisition of Ambry Genetics, completed on Feb. 3, for $600 million, is expected to have significantly enhanced Tempus's capabilities in hereditary cancer and cardiovascular diagnostics. This move not only aims to expand Tempus's laboratory operations to the West Coast but also strengthens its position in genomic diagnostics and personalized medicine. Additionally, the acquisition of Deep 6 AI in March 2025 might have also bolstered Tempus's data analytics capabilities, enabling more efficient clinical trial matching and research insights. These strategic acquisitions are expected to have contributed positively to Tempus's financial performance in the first quarter.
EBITDA Uptrend to Continue in Q1: Tempus AI delivered adjusted EBITDA of -$7.8 million in the fourth quarter of 2025, which marked a $27.3 million year-over-year improvement and also a significant improvement on a sequential basis. Given that the company has guided positive adjusted EBITDA of $5 million for full-year 2025, representing a significant $110 million improvement over 2024, this progress is expected to start becoming visible from the first quarter of 2025 results. The company's focus on operational efficiencies, expansion of high-margin offerings and integration of recent acquisitions are all anticipated to have contributed to this trajectory toward profitability in the first quarter.
Cash Flow Trend: Tempus AI’s business is synergistic across all its products, from Genomic sequencing to Data business and AI Applications business. This accelerates the company’s path to positive cash flow. The company’s cumulative operating cash outflow was $189 million at the end of the fourth quarter of 2024, an improvement from $214.3 million of outflow a year ago. We expect to see a continued uptrend in operating cash flow in the first-quarter results.
Bright Long-term Prospects
Tempus AI is a technology company advancing precision medicine through the practical application of artificial intelligence, including generative AI, in healthcare to create Intelligent Diagnostics. The company's focus on creating Intelligent Diagnostics allows physicians to deliver personalized, data-driven care while enabling researchers to accelerate the research and development of novel therapeutics.
The national launch of olivia earlier this year, Tempus’ AI-enabled personal health concierge app, positions the company to benefit from the growing shift toward patient-centric healthcare. By helping individuals manage and understand their own health data, Tempus could drive greater engagement and adoption across patients and health systems, opening new revenue opportunities.
The FDA approval and launch of the xT CDx test is another major milestone, strengthening Tempus AI’s oncology portfolio. With one of the largest gene panels for solid tumor profiling, xT CDx is likely to increase demand for Tempus’ diagnostic services.
Additionally, the expansion of Tempus One with new generative AI tools addresses key challenges in clinical trial matching, prior authorizations and real-world data analysis, which could drive adoption among healthcare providers and pharma companies.
Further, in a recent breakthrough, the Centers for Medicare and Medicaid Services (CMS) announced that it would allow reimbursement for the assessment of cardiac dysfunction using the Tempus ECG-AF algorithm. ECG-AF is one of just a few FDA-authorized medical technologies in the country to be impacted by the new CMS decision. This allows Tempus AI to more broadly support clinicians in identifying patients at increased risk of atrial fibrillation.
Meanwhile, the company is also expanding through compelling acquisitions. The acquisitions of Ambry Genetics and Deep 6 AI position Tempus AI for long-term synergies across precision medicine, diagnostics and clinical research. By integrating Ambry Genetics’ deep genetic testing expertise with Tempus' AI-driven clinical data platform, Tempus can further personalize patient care through a richer understanding of the genetic basis of disease. Simultaneously, the addition of Deep 6 AI’s robust trial-matching and real-world evidence capabilities will enable Tempus to accelerate clinical trial enrollment and close care gaps more efficiently.
However, investments tied to these updates, including product development, regulatory efforts, and marketing, are likely to have pushed operating expenses higher in the first quarter, putting some pressure on short-term profitability. Broader macroeconomic factors, like hospital budget constraints and biotech funding trends, could also affect adoption rates.
Expensive Valuation
TEM’s stock is currently overvalued compared to its industry, as shown in the chart below.
TEM is currently trading at a forward 12-month price-to-sales (P/S) ratio of 6.81, a premium to the broader industry's average of 5.15X.
It also trades higher than other industry players like 10x Genomics (1.61X) and SOPHiA GENETICS (2.6X). However, the stock is trading below its one-year median of 8.28X, suggesting that it has moderated somewhat from its historical highs.
Image Source: Zacks Investment Research
Our Take
With the AI market projected to grow exponentially in the coming years, Tempus AI is well-positioned to capitalize on expanding opportunities. With a strong financial outlook and efforts to improve healthcare outcomes, TEM presents a unique opportunity for investors seeking high returns from the AI and healthcare sectors.
Yet, despite the company’s several long-term upsides, the expensive valuation is limiting this Zacks Rank #3 (Hold) stock’s near-term gains. While current shareholders should hold their positions, new investors should wait for the stock to retract some of its recent gains, providing a better entry point. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Tempus AI Stock Surges 43% in Q1: Buy Now or Wait for Earnings?
Tempus AI, Inc. (TEM - Free Report) is scheduled to report first-quarter fiscal 2025 results on May 6.
In the last reported quarter, the company’s adjusted loss of 18 cents was wider than the Zacks Consensus Estimate of a loss of 15 cents per share. Tempus AI, which went public in June 2024, exceeded estimates in one of the trailing three quarters and missed in two, the average negative earnings surprise being 6.46%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar).
The Zacks Consensus Estimate for revenues is currently pegged at $248.08 million for the first quarter.
The Zacks Consensus Estimate for the first-quarter bottom line has been steady at a loss of 27 cents per share over the past 90 days.
TEM's Earnings Estimate Revision Trend
Image Source: Zacks Investment Research
Throughout the first quarter of 2025, Tempus AI had an impressive run on the bourses with a 43% gain. Despite macroeconomic challenges, including escalating trade tensions that broadly impacted the healthcare technology sector, the company witnessed strong momentum, primarily driven by a series of strategic acquisitions and partnerships in the field of AI-driven precision medicine.
During this period, the company not only surpassed the 2.1% gain posted by the broader industry but also significantly outperformed the 4.9% decline of the S&P 500 benchmark index. The company has also outperformed other players in the health infotech field, like 10x Genomics (TXG - Free Report) and SOPHiA GENETICS (SOPH - Free Report) . While TXG declined 39.2%, SOPH gained 8.1% during the said period.
Q1 Price Comparison
Image Source: Zacks Investment Research
Let’s see how things have shaped up for TEM shares prior to this announcement:
Factors to Note Prior to Tempus's Q1 Earnings
This innovator in artificial intelligence-based precision medicine solutions has been attracting investors' interest since its IPO. As the market’s appetite for AI applications in healthcare is rapidly increasing, Tempus AI is emerging as a top contender in this high-growth sector. We expect the company’s cutting-edge product lines and strategic plans to prove significant in driving the company’s first-quarter results.
Balanced Segmental Numbers to Drive Growth: TEM’s Genomics unit, which reported more than 30% growth in the fourth quarter, is expected to once again report strong growth in the first quarter, banking on continued unit growth pick-up.
Data and Services revenues, which accelerated 44.6% year over year in the last reported quarter, are once again expected to have seen strong growth, primarily banking on accelerated revenue growth within Insights, the company’s data licensing business.
The acquisitions of Ambry Genetics and Deep 6 AI are expected to have contributed to Tempus AI's strategic expansion during the first quarter of 2025. The acquisition of Ambry Genetics, completed on Feb. 3, for $600 million, is expected to have significantly enhanced Tempus's capabilities in hereditary cancer and cardiovascular diagnostics. This move not only aims to expand Tempus's laboratory operations to the West Coast but also strengthens its position in genomic diagnostics and personalized medicine. Additionally, the acquisition of Deep 6 AI in March 2025 might have also bolstered Tempus's data analytics capabilities, enabling more efficient clinical trial matching and research insights. These strategic acquisitions are expected to have contributed positively to Tempus's financial performance in the first quarter.
EBITDA Uptrend to Continue in Q1: Tempus AI delivered adjusted EBITDA of -$7.8 million in the fourth quarter of 2025, which marked a $27.3 million year-over-year improvement and also a significant improvement on a sequential basis. Given that the company has guided positive adjusted EBITDA of $5 million for full-year 2025, representing a significant $110 million improvement over 2024, this progress is expected to start becoming visible from the first quarter of 2025 results. The company's focus on operational efficiencies, expansion of high-margin offerings and integration of recent acquisitions are all anticipated to have contributed to this trajectory toward profitability in the first quarter.
Cash Flow Trend: Tempus AI’s business is synergistic across all its products, from Genomic sequencing to Data business and AI Applications business. This accelerates the company’s path to positive cash flow. The company’s cumulative operating cash outflow was $189 million at the end of the fourth quarter of 2024, an improvement from $214.3 million of outflow a year ago. We expect to see a continued uptrend in operating cash flow in the first-quarter results.
Bright Long-term Prospects
Tempus AI is a technology company advancing precision medicine through the practical application of artificial intelligence, including generative AI, in healthcare to create Intelligent Diagnostics. The company's focus on creating Intelligent Diagnostics allows physicians to deliver personalized, data-driven care while enabling researchers to accelerate the research and development of novel therapeutics.
The national launch of olivia earlier this year, Tempus’ AI-enabled personal health concierge app, positions the company to benefit from the growing shift toward patient-centric healthcare. By helping individuals manage and understand their own health data, Tempus could drive greater engagement and adoption across patients and health systems, opening new revenue opportunities.
The FDA approval and launch of the xT CDx test is another major milestone, strengthening Tempus AI’s oncology portfolio. With one of the largest gene panels for solid tumor profiling, xT CDx is likely to increase demand for Tempus’ diagnostic services.
Additionally, the expansion of Tempus One with new generative AI tools addresses key challenges in clinical trial matching, prior authorizations and real-world data analysis, which could drive adoption among healthcare providers and pharma companies.
Further, in a recent breakthrough, the Centers for Medicare and Medicaid Services (CMS) announced that it would allow reimbursement for the assessment of cardiac dysfunction using the Tempus ECG-AF algorithm. ECG-AF is one of just a few FDA-authorized medical technologies in the country to be impacted by the new CMS decision. This allows Tempus AI to more broadly support clinicians in identifying patients at increased risk of atrial fibrillation.
Meanwhile, the company is also expanding through compelling acquisitions. The acquisitions of Ambry Genetics and Deep 6 AI position Tempus AI for long-term synergies across precision medicine, diagnostics and clinical research. By integrating Ambry Genetics’ deep genetic testing expertise with Tempus' AI-driven clinical data platform, Tempus can further personalize patient care through a richer understanding of the genetic basis of disease. Simultaneously, the addition of Deep 6 AI’s robust trial-matching and real-world evidence capabilities will enable Tempus to accelerate clinical trial enrollment and close care gaps more efficiently.
However, investments tied to these updates, including product development, regulatory efforts, and marketing, are likely to have pushed operating expenses higher in the first quarter, putting some pressure on short-term profitability. Broader macroeconomic factors, like hospital budget constraints and biotech funding trends, could also affect adoption rates.
Expensive Valuation
TEM’s stock is currently overvalued compared to its industry, as shown in the chart below.
TEM is currently trading at a forward 12-month price-to-sales (P/S) ratio of 6.81, a premium to the broader industry's average of 5.15X.
It also trades higher than other industry players like 10x Genomics (1.61X) and SOPHiA GENETICS (2.6X). However, the stock is trading below its one-year median of 8.28X, suggesting that it has moderated somewhat from its historical highs.
Image Source: Zacks Investment Research
Our Take
With the AI market projected to grow exponentially in the coming years, Tempus AI is well-positioned to capitalize on expanding opportunities. With a strong financial outlook and efforts to improve healthcare outcomes, TEM presents a unique opportunity for investors seeking high returns from the AI and healthcare sectors.
Yet, despite the company’s several long-term upsides, the expensive valuation is limiting this Zacks Rank #3 (Hold) stock’s near-term gains. While current shareholders should hold their positions, new investors should wait for the stock to retract some of its recent gains, providing a better entry point. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.