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Tempus AI Stock Before Q3 Earnings Release: To Buy or Not to Buy?

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Key Takeaways

  • Tempus AI is expected to report Q3 results on Nov. 3, after a 48% stock rally during the quarter.
  • The Paige acquisition expanded TEM's digital pathology dataset and AI expertise.
  • Multiple FDA clearances strengthened Tempus AI's diagnostics and imaging portfolio.

Tempus AI, Inc. (TEM - Free Report) is expected to report third-quarter 2025 results on Nov. 3. 

In the last reported quarter, the company’s adjusted loss of 22 cents was narrower than the Zacks Consensus Estimate of a loss of 23 cents per share. Tempus AI, which went public in June 2024, exceeded estimates in three of the trailing four quarters and missed in one, the average negative earnings surprise being 0.72%.

The Zacks Consensus Estimate for revenues is currently pegged at $326.9 million for the third quarter, implying an 80.7% improvement over the year-ago period.

The Zacks Consensus Estimate for the third-quarter loss per share has remained unchanged at 16 cents over the past 30 days.

TEM's Earnings Estimate Revision Trend

Zacks Investment Research

Image Source: Zacks Investment Research

Throughout the third quarter of 2025, Tempus AI had an impressive run, with a 48% 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 6% gain posted by the broader industry. The S&P 500 benchmark index gained 9.8% during this period. 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 has gained 2.8%, SOPH has gained 35.3% during the said period.

Q3 Price Comparison

Zacks Investment Research

Image Source: Zacks Investment Research

Let’s see how things have shaped up for TEM shares prior to this announcement:

Key Factors to Note Prior to Tempus AI's Q3 Earnings

In July, Tempus announced the acquisition of Paige, an AI company specializing in digital pathology. The acquisition, valued at $81.25 million, is expected to allow Tempus to grow its dataset and expand its experienced technical team. Paige brings nearly 7 million digitized pathology slide images and associated clinical and molecular data that are carefully labeled. Paige has already created the first AI tool cleared by the FDA for pathology. These factors will help Tempus establish a strong footprint in digital pathology with an industry-leading technology portfolio.

In the third quarter, we expect Tempus’ Genomics segment’s sale to have experienced improvement from accelerating volume growth in oncology testing and sustained strength in hereditary sequencing. Meanwhile, the Data and Services business is expected to experience strong demand for Tempus’ proprietary data licensing and AI solutions. The recent AstraZeneca–Pathos collaboration underscores rising pharmaceutical interest in Tempus’ large-scale molecular and clinical datasets. 

During the quarter to be reported, Tempus AI achieved several key regulatory milestones that strengthened its position in AI-driven diagnostics. The company received multiple 510(k) clearances from the Food and Drug Administration (FDA) across its product portfolio. These include clearance for Tempus ECG-Low EF (ejection fraction), an AI-based software designed to identify patients who may have a low left ventricular ejection fraction and an updated version of Tempus Pixel, the company’s AI-powered cardiac imaging platform that now supports generation of T1 and T2 inline maps to enhance cardiac MR image analysis. Additionally, Tempus xR IVD, an RNA-based diagnostic device also received FDA approval. xR IVD will be offered as a life sciences tool to support drug development programs. 

Tempus AI’s second-quarter gross profit more than doubled, while adjusted EBITDA losses narrowed, bringing the company within reach of profitability. It expects adjusted EBITDA of $5 million for full year 2025 and we expect the company to have progressed meaningfully in the to-be-reported quarter. 

Further, investments tied to these updates, including product development, regulatory efforts and marketing, are likely to have pushed operating expenses higher in the third quarter, putting some pressure on short-term profitability. Broader macroeconomic factors, like tariffs, 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 10.26, a premium to the broader industry's average of 5.83X.

It also trades higher than other industry players like 10x Genomics (2.53X) and SOPHiA GENETICS (3.59X). 

Zacks Investment Research

Image Source: Zacks Investment Research

Our Take

As the AI market is expected to expand rapidly in the coming years, Tempus AI is strategically positioned to seize emerging opportunities. Backed by a solid financial outlook and a focus on advancing healthcare outcomes, TEM offers investors an attractive prospect for high returns in the AI and healthcare spaces.

Yet, despite the company’s several recent upsides, its premium valuation and lack of near-term profitability are 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.


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