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TEM vs. ILMN: Which Precision Oncology Stock Is Worth Buying Now?
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Key Takeaways
TEM projects strong 2025 sales growth while ILMN expects steadier earnings gains and margin expansion.
Tempus is advancing diagnostics like xM and PurIST while expanding collaborations with pharma partners.
ILMN strengthened its oncology lineup with TruSight Oncology 500 upgrades and broader pharma partnerships.
Investors are showing growing interest in the rapidly expanding Precision Oncology market, which is expected to witness a compound annual growth rate (CAGR) of 8% between 2025 and 2030, according to Grand View Research. Tempus AI (TEM - Free Report) and Illumina (ILMN - Free Report) are two key players with significant presence in this market.
Tempus AI’s oncology segment combines genomic testing, liquid biopsy, and AI-driven diagnostics to personalize treatment decisions today, while building foundational models and multimodal datasets that will shape the future of cancer care and drug discovery. An expanding NGS oncology portfolio is helping Illumina drive the revolution in cancer genomics.
Given market growth driven by advances in technology, as well as rapid demand for diagnostic products providing effective clinical results, which of these two stocks is the better investment opportunity right now? Let us dive into the details.
Over the past year, shares of Tempus AI have surged 61.2% while those of Illumina have lost 25.2%. The broader medical sector has lost 15.7% and the S&P 500 Index has risen 18.4% during the period.
Image Source: Zacks Investment Research
The Case for Tempus AI
For Tempus, the expansion of partnerships with existing customers is essential for its growth. The company has recently partnered with AstraZeneca (AZTA) and Pathos AI to develop a multimodal foundation model in oncology, enabling the derivation of biological and clinical insights, the discovery of novel drug targets, and the advancement of therapeutics. In the same month, Tempus teamed up with Verastem Oncology (VSTM) to develop a companion diagnostic (CDx) test for RAS/MAPK pathway-driven cancers.
On the innovation side, the company introduced xM, a liquid biopsy assay for treatment response monitoring (TRM) designed to detect molecular response to immune-checkpoint inhibitor therapy in advanced solid tumors. It also plans to develop and deploy PurIST, an RNA-based algorithmic test that classifies pancreatic ductal adenocarcinoma (PDAC) tumors as “classical” or “basal” subtypes, in collaboration with GeneCentric.
Tempus also unveiled the largest real-world evidence supporting the integration of PurIST into routine clinical care for patients with advanced PDAC. Recently, the company expanded its AI-enabled care pathway intelligence platform, Tempus Next, into breast cancer to address critical care gaps in breast cancer care.
Operationally, TEM’s adjusted gross margin expanded 1649 bps in the second quarter, despite a 32.2% rise in the cost of revenues. Meanwhile, Tempus AI experienced another quarter of sequential improvement in adjusted EBITDA, which went from a negative $16 million in the previous quarter to a negative $5.6 million in the second quarter.
These factors have encouraged the company to raise its 2025 sales guidance for the second time within six months. Full-year revenues are now expected to be approximately $1.26 billion (earlier $1.25 billion), indicating nearly 82% annual growth. The company also expects a positive adjusted EBITDA of $5 million in 2025.
The Case for Illumina
Over the years, Illumina has formed multiple pharma partnerships, including one with Labcorp to enhance access to the latest genomic testing for community oncology physicians. The company expanded collaboration with Janssen to advance the development of a molecular residual disease (MRD) assay, underscoring Illumina's promise of a whole-genome approach in oncology.
Expanding its in vitro diagnostic (IVD) portfolio, Illumina partnered with Pillar Biosciences to offer Pillar oncoReveal companion diagnostics (CDx) to Illumina customers beginning this summer. The continued expansion of tumor-agnostic CDx claims underscores Illumina's commitment to advancing access for patients to precision oncology care by generating standardized, globally distributable tests.
Illumina’s market-leading cancer research assay, TruSight Oncology (TSO) 500, continues to see increased utilization and broader adoption. Recently, the company has launched the next generation of TSO 500, which enables comprehensive genomic profiling. TSO 500 version 2 offers a streamlined sample-to-analysis workflow. In May 2025, Illumina launched DRAGEN version 4.4 software, including out-of-the-box oncology applications for clinical research. Following FDA approval last year, Illumina's IVD TSO Comprehensive test has gained broad payer reimbursement, expanding access to comprehensive genomic profiling and enabling matching of patients with targeted therapies.
Operationally, despite experiencing declining revenues, the company's non-GAAP gross margin was 69.4% for the second quarter, representing a 200-basis-point increase quarter over quarter. Non-GAAP operating margin was 23.8% (in the second quarter), which increased 160 basis points year over year. Operating profit increased approximately 4% year over year, reflecting improved operating leverage resulting from an enhanced cost structure.
By focusing on operational excellence and product innovation, the company has lowered its 2025 sales decline outlook. It now expects Core Illumina revenues to decline 0.5-2.5% year over year on a constant currency basis (earlier 1-3% decline). Non-GAAP diluted EPS is now projected to be in the range of $4.45-$4.55 (earlier $4.20-$4.30) in 2025.
Valuation of TEM and ILMN
Tempus AI is trading at a forward 12-month price-to-sales (P/S) ratio of 9.36, above its median of 8.09 over the past year. Illumina’s forward sales multiple is 3.34, below its one-year median of 3.58.
Image Source: Zacks Investment Research
How Do Zacks Estimates Compare for TEM & ILMN?
The Zacks Consensus Estimate for TEM’s 2025 sales implies year-over-year growth of 81.21%. For 2025, the loss per share is projected to be 69 cents compared with $1.58 a year ago.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for ILMN’s 2025 sales implies a year-over-year decline of 2.5%. For 2025, EPS is projected to be $4.42 compared with the prior-year EPS of $2.45. The earnings estimates have remained stable over the past 30 days.
Image Source: Zacks Investment Research
TEM or ILMN: Which One to Pick?
Both Tempus and Illumina showcase strong fundamentals supported by innovation and partnerships. Tempus is scaling growth through collaborations, while advancing next-gen diagnostics like xM and PurIST, alongside steady operational gains and raised sales guidance. Illumina, on the other hand, continues to strengthen its oncology leadership with TruSight Oncology 500 advancements, expanded pharma partnerships, and a solid IVD portfolio, backed by margin improvements and a refined sales outlook.
Analysts expect upbeat earnings growth for ILMN. Additionally, ILMN is more attractively valued than TEM, which makes ILMN a more favorable option for investors. However, in terms of stock performance, Tempus has the edge.
Image: Bigstock
TEM vs. ILMN: Which Precision Oncology Stock Is Worth Buying Now?
Key Takeaways
Investors are showing growing interest in the rapidly expanding Precision Oncology market, which is expected to witness a compound annual growth rate (CAGR) of 8% between 2025 and 2030, according to Grand View Research. Tempus AI (TEM - Free Report) and Illumina (ILMN - Free Report) are two key players with significant presence in this market.
Tempus AI’s oncology segment combines genomic testing, liquid biopsy, and AI-driven diagnostics to personalize treatment decisions today, while building foundational models and multimodal datasets that will shape the future of cancer care and drug discovery. An expanding NGS oncology portfolio is helping Illumina drive the revolution in cancer genomics.
Given market growth driven by advances in technology, as well as rapid demand for diagnostic products providing effective clinical results, which of these two stocks is the better investment opportunity right now? Let us dive into the details.
Over the past year, shares of Tempus AI have surged 61.2% while those of Illumina have lost 25.2%. The broader medical sector has lost 15.7% and the S&P 500 Index has risen 18.4% during the period.
Image Source: Zacks Investment Research
The Case for Tempus AI
For Tempus, the expansion of partnerships with existing customers is essential for its growth. The company has recently partnered with AstraZeneca (AZTA) and Pathos AI to develop a multimodal foundation model in oncology, enabling the derivation of biological and clinical insights, the discovery of novel drug targets, and the advancement of therapeutics. In the same month, Tempus teamed up with Verastem Oncology (VSTM) to develop a companion diagnostic (CDx) test for RAS/MAPK pathway-driven cancers.
On the innovation side, the company introduced xM, a liquid biopsy assay for treatment response monitoring (TRM) designed to detect molecular response to immune-checkpoint inhibitor therapy in advanced solid tumors. It also plans to develop and deploy PurIST, an RNA-based algorithmic test that classifies pancreatic ductal adenocarcinoma (PDAC) tumors as “classical” or “basal” subtypes, in collaboration with GeneCentric.
Tempus also unveiled the largest real-world evidence supporting the integration of PurIST into routine clinical care for patients with advanced PDAC. Recently, the company expanded its AI-enabled care pathway intelligence platform, Tempus Next, into breast cancer to address critical care gaps in breast cancer care.
Operationally, TEM’s adjusted gross margin expanded 1649 bps in the second quarter, despite a 32.2% rise in the cost of revenues. Meanwhile, Tempus AI experienced another quarter of sequential improvement in adjusted EBITDA, which went from a negative $16 million in the previous quarter to a negative $5.6 million in the second quarter.
These factors have encouraged the company to raise its 2025 sales guidance for the second time within six months. Full-year revenues are now expected to be approximately $1.26 billion (earlier $1.25 billion), indicating nearly 82% annual growth. The company also expects a positive adjusted EBITDA of $5 million in 2025.
The Case for Illumina
Over the years, Illumina has formed multiple pharma partnerships, including one with Labcorp to enhance access to the latest genomic testing for community oncology physicians. The company expanded collaboration with Janssen to advance the development of a molecular residual disease (MRD) assay, underscoring Illumina's promise of a whole-genome approach in oncology.
Expanding its in vitro diagnostic (IVD) portfolio, Illumina partnered with Pillar Biosciences to offer Pillar oncoReveal companion diagnostics (CDx) to Illumina customers beginning this summer. The continued expansion of tumor-agnostic CDx claims underscores Illumina's commitment to advancing access for patients to precision oncology care by generating standardized, globally distributable tests.
Illumina’s market-leading cancer research assay, TruSight Oncology (TSO) 500, continues to see increased utilization and broader adoption. Recently, the company has launched the next generation of TSO 500, which enables comprehensive genomic profiling. TSO 500 version 2 offers a streamlined sample-to-analysis workflow. In May 2025, Illumina launched DRAGEN version 4.4 software, including out-of-the-box oncology applications for clinical research. Following FDA approval last year, Illumina's IVD TSO Comprehensive test has gained broad payer reimbursement, expanding access to comprehensive genomic profiling and enabling matching of patients with targeted therapies.
Operationally, despite experiencing declining revenues, the company's non-GAAP gross margin was 69.4% for the second quarter, representing a 200-basis-point increase quarter over quarter. Non-GAAP operating margin was 23.8% (in the second quarter), which increased 160 basis points year over year. Operating profit increased approximately 4% year over year, reflecting improved operating leverage resulting from an enhanced cost structure.
By focusing on operational excellence and product innovation, the company has lowered its 2025 sales decline outlook. It now expects Core Illumina revenues to decline 0.5-2.5% year over year on a constant currency basis (earlier 1-3% decline). Non-GAAP diluted EPS is now projected to be in the range of $4.45-$4.55 (earlier $4.20-$4.30) in 2025.
Valuation of TEM and ILMN
Tempus AI is trading at a forward 12-month price-to-sales (P/S) ratio of 9.36, above its median of 8.09 over the past year. Illumina’s forward sales multiple is 3.34, below its one-year median of 3.58.
Image Source: Zacks Investment Research
How Do Zacks Estimates Compare for TEM & ILMN?
The Zacks Consensus Estimate for TEM’s 2025 sales implies year-over-year growth of 81.21%. For 2025, the loss per share is projected to be 69 cents compared with $1.58 a year ago.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for ILMN’s 2025 sales implies a year-over-year decline of 2.5%. For 2025, EPS is projected to be $4.42 compared with the prior-year EPS of $2.45. The earnings estimates have remained stable over the past 30 days.
Image Source: Zacks Investment Research
TEM or ILMN: Which One to Pick?
Both Tempus and Illumina showcase strong fundamentals supported by innovation and partnerships. Tempus is scaling growth through collaborations, while advancing next-gen diagnostics like xM and PurIST, alongside steady operational gains and raised sales guidance. Illumina, on the other hand, continues to strengthen its oncology leadership with TruSight Oncology 500 advancements, expanded pharma partnerships, and a solid IVD portfolio, backed by margin improvements and a refined sales outlook.
Analysts expect upbeat earnings growth for ILMN. Additionally, ILMN is more attractively valued than TEM, which makes ILMN a more favorable option for investors. However, in terms of stock performance, Tempus has the edge.
TEM and ILMN carry a Zacks Rank #3 (Hold) each. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.