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Tempus AI Near $75 Target? Valuation, Upside and Risks
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Key Takeaways
TEM trades near $70.61 against a $75 target, with upside tied to execution and regulatory progress.
Valuation implies 8.6x forward sales, hinging on pricing and reimbursement improvement into 2026.
Genomics growth, data bookings, and regulatory milestones will drive margin and EBITDA gains.
Tempus AI (TEM - Free Report) has rallied hard in 2025 and now trades close to its 6–12 month target. Progress from regulators and steady execution will be key.
The trend is strong, but slow booking-to-revenue conversion and ongoing GAAP losses suggest patience on new entries.
Where Shares Trade Versus Objective
Shares recently changed hands at $70.61 against a 6–12 month target of $75, leaving modest upside from current levels as execution and approvals unfold. TEM carries a Zacks Rank #3 (Hold). Zacks Style Scores are mixed, with Value F, Growth C and Momentum B.
Year to date, TEM is up 104.9%, well ahead of the subindustry, sector and the S&P 500. The remaining upside to the target therefore, hinges on catalysts translating into better pricing and margin progress.
YTD Price Performance
Image Source: Zacks Investment Research
How the Multiple Stacks Up
TEM trades at 8.1x forward 12-month sales versus 4.8x times for the sub-industry, 2.2x for the sector and 5.3x for the S&P 500. Over the past year, the range has been 4.9x–16.5x with a 1-year median of 8.1x. That premium places a higher bar on delivery.
The stock’s advance has widened valuation spreads versus peers, yet the target embeds 8.6 times forward sales, suggesting room for upside if pricing and reimbursement steadily improve as management executes.
Catalysts That Could Support the Case
Regulatory pricing catch-up is crucial. Management plans to migrate a majority of xT CDx test volume onto the Advanced Diagnostic Laboratory Test pathway through 2026 and expects to file for xT in vitro diagnostic approval by year-end 2025, with xF to follow. These steps, together with assay-by-assay approvals, support better average selling prices over time. Minimal residual disease reimbursement is “on track,” with gradual quarterly ramp anticipated.
Beyond pricing, the diagnostics engine continues to expand. Genomics revenue more than doubled year over year through the first nine months of 2025 on oncology volume and hereditary testing gains, while the Data and Services line posted double-digit growth on larger, multi-year agreements. Expanding data bookings enhance visibility and can drive operating leverage if conversion remains on schedule.
Execution and Conversion Risks to Monitor
The average selling price (ASP) remains below peers until approvals are completed, and the timing rests on regulatory reviews that can face delays. Until then, unit economics trail competitors.
Data bookings convert over multi-year periods and are typically second-half weighted, which can create quarterly volatility and mask underlying demand. GAAP losses persist as the company invests in compute, regulatory, and integration initiatives, while competition and integration complexity add execution risk.
What the Short-Term Rating Signals Now
The Zacks Rank #3 (Hold) and mixed Style Scores indicate balanced near-term risk-reward after the sharp year-to-date move. For investors looking to initiate exposure, pullbacks or confirmation on regulatory filings and minimal residual disease reimbursement milestones may provide better risk-managed entry points.
Investors comparing across medical information systems may also watch Doximity (DOCS - Free Report) and 10x Genomics (TXG - Free Report) . Both are listed among industry peers with Zacks Rank #3 (Hold), offering alternative ways to participate while awaiting TEM’s milestone execution.
Key Numbers to Track into 2026
Management now expects 2025 revenue of approximately $1.27 billion for the consolidated business. Adjusted EBITDA is guided to about $20 million for the current year, with continued cost discipline and sales-force efficiency post integration.
Image Source: Zacks Investment Research
Our forward 12-month earnings per share consensus anticipates improving results through 2026 and a potential positive print in 2027. Monitoring revenue cadence, pricing uplift from Advanced Diagnostic Laboratory Test migrations and in vitro diagnostic approvals, the minimal residual disease reimbursement ramp and EBITDA progression will be central to the path toward sustained profitability. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Tempus AI Near $75 Target? Valuation, Upside and Risks
Key Takeaways
Tempus AI (TEM - Free Report) has rallied hard in 2025 and now trades close to its 6–12 month target. Progress from regulators and steady execution will be key.
The trend is strong, but slow booking-to-revenue conversion and ongoing GAAP losses suggest patience on new entries.
Where Shares Trade Versus Objective
Shares recently changed hands at $70.61 against a 6–12 month target of $75, leaving modest upside from current levels as execution and approvals unfold. TEM carries a Zacks Rank #3 (Hold). Zacks Style Scores are mixed, with Value F, Growth C and Momentum B.
Year to date, TEM is up 104.9%, well ahead of the subindustry, sector and the S&P 500. The remaining upside to the target therefore, hinges on catalysts translating into better pricing and margin progress.
YTD Price Performance
Image Source: Zacks Investment Research
How the Multiple Stacks Up
TEM trades at 8.1x forward 12-month sales versus 4.8x times for the sub-industry, 2.2x for the sector and 5.3x for the S&P 500. Over the past year, the range has been 4.9x–16.5x with a 1-year median of 8.1x. That premium places a higher bar on delivery.
The stock’s advance has widened valuation spreads versus peers, yet the target embeds 8.6 times forward sales, suggesting room for upside if pricing and reimbursement steadily improve as management executes.
Catalysts That Could Support the Case
Regulatory pricing catch-up is crucial. Management plans to migrate a majority of xT CDx test volume onto the Advanced Diagnostic Laboratory Test pathway through 2026 and expects to file for xT in vitro diagnostic approval by year-end 2025, with xF to follow. These steps, together with assay-by-assay approvals, support better average selling prices over time. Minimal residual disease reimbursement is “on track,” with gradual quarterly ramp anticipated.
Beyond pricing, the diagnostics engine continues to expand. Genomics revenue more than doubled year over year through the first nine months of 2025 on oncology volume and hereditary testing gains, while the Data and Services line posted double-digit growth on larger, multi-year agreements. Expanding data bookings enhance visibility and can drive operating leverage if conversion remains on schedule.
Execution and Conversion Risks to Monitor
The average selling price (ASP) remains below peers until approvals are completed, and the timing rests on regulatory reviews that can face delays. Until then, unit economics trail competitors.
Data bookings convert over multi-year periods and are typically second-half weighted, which can create quarterly volatility and mask underlying demand. GAAP losses persist as the company invests in compute, regulatory, and integration initiatives, while competition and integration complexity add execution risk.
What the Short-Term Rating Signals Now
The Zacks Rank #3 (Hold) and mixed Style Scores indicate balanced near-term risk-reward after the sharp year-to-date move. For investors looking to initiate exposure, pullbacks or confirmation on regulatory filings and minimal residual disease reimbursement milestones may provide better risk-managed entry points.
Investors comparing across medical information systems may also watch Doximity (DOCS - Free Report) and 10x Genomics (TXG - Free Report) . Both are listed among industry peers with Zacks Rank #3 (Hold), offering alternative ways to participate while awaiting TEM’s milestone execution.
Key Numbers to Track into 2026
Management now expects 2025 revenue of approximately $1.27 billion for the consolidated business. Adjusted EBITDA is guided to about $20 million for the current year, with continued cost discipline and sales-force efficiency post integration.
Image Source: Zacks Investment Research
Our forward 12-month earnings per share consensus anticipates improving results through 2026 and a potential positive print in 2027. Monitoring revenue cadence, pricing uplift from Advanced Diagnostic Laboratory Test migrations and in vitro diagnostic approvals, the minimal residual disease reimbursement ramp and EBITDA progression will be central to the path toward sustained profitability. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.