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What's Fueling TEM Diagnostics Segment's Strong 2026 Outlook?
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Key Takeaways
TEM Diagnostics grew strongly in 2025, with oncology up 26% and hereditary up 29%.
TEM sees ~30% oncology growth in 2026 as genomic sequencing adoption and MRD expansion boost demand.
Tempus AI expects ASPs to rise about $500 over time, driven by FDA-approved assays, better coverage and mix.
Tempus AI’s (TEM - Free Report) Diagnostics arm is transitioning from a traditional testing business into a highly differentiated, AI-powered clinical intelligence platform. The business delivered a strong and accelerating performance in 2025, emerging as one of the company’s primary growth engines.
The Diagnostics segment delivered robust growth across its core areas, with Oncology volumes rising 26% year over year and Hereditary volumes increasing 29%. One of the standout areas was minimal residual disease (MRD), which recorded an exceptional 56% sequential growth for the fourth quarter of 2025, highlighting both strong demand and early-stage market penetration.
Tempus expects the Diagnostics business to maintain strong momentum in 2026, particularly within oncology, where growth is projected to around 30% range. Several factors are expected to drive this continued expansion. First, the adoption of genomic sequencing in oncology continues to rise structurally, supporting sustained volume growth across both solid tumor and liquid biopsy testing. Second, MRD is anticipated to become a major catalyst as reimbursement improves and the company expands its commercial efforts, unlocking a large addressable market that is currently underpenetrated.
Another important growth factor for 2026 is pricing expansion. Average selling prices (ASPs), which were approximately $1,640 in fourth-quarter 2025, are expected to experience $500 upside over time. This uplift can be attributed to the transition to FDA-approved versions of key assays, improved payer coverage and a favorable shift in product mix.
Peer Update
Guardant Health’s (GH - Free Report) oncology segment remained strong in 2025, delivering 26% annual revenue growth driven by a 34% increase in test volumes, led by Guardant360 and the rapid adoption of Reveal (MRD). The screening segment, anchored by the Shield blood-based cancer screening test, completed its first full year of commercialization, generating $79.7 million in revenues and approximately 87,000 tests, supported by high patient adherence and strong early demand.
In 2026, the oncology segment is projected to grow 25-27%, driven by continued strong momentum across its core products. Guardant360 Liquid is expected to benefit from increasing adoption of Smart Platform applications and Guardant360 Tissue is likely to sustain its growth trajectory, building on the recent Smart Platform upgrade. Screening is projected to more than double, driven by commercial scale-up, partnerships, and potential guideline inclusion, making it the fastest-growing segment.
In 2025, Myriad Genetics’ (MYGN - Free Report) hereditary and tumor profiling businesses showed steady and improving momentum, supported by strong execution and growing clinical adoption. Key products like MyRisk continued to gain share, with double-digit growth in both affected and unaffected populations, reflecting rising demand for risk assessment and preventive screening.
In 2026, the hereditary cancer segment is expected to grow in the high single-digit range, driven by improved EMR-enabled patient identification, continued expansion in provider adoption, and sustained commercial execution. In tumor profiling, key catalysts include the launch of AI-enabled Prolaris in second-quarter 2026 and the early-stage rollout of Precise MRD.
TEM Stock Outperforms Industry & Benchmark
Over the past year, Tempus AI’s shares have lost 4.2% compared with the industry’s 28.1% decline. The S&P 500 composite has improved 16% over the said period.
Image Source: Zacks Investment Research
Discounted Valuation
TEM currently trades at a forward 12-month Price-to-Sales (P/S) of 4.80X compared with the industry median of 7.79X.
Image Source: Zacks Investment Research
TEM Stock Estimate Trend
Over the past 30 days, Tempus AI's loss per share estimate for 2026 has widened 2 cents.
Image Source: Zacks Investment Research
TEM stock currently carries a Zacks Rank #4 (Sell).
View the Zacks #1 Rank List
Image: Bigstock
What's Fueling TEM Diagnostics Segment's Strong 2026 Outlook?
Key Takeaways
Tempus AI’s (TEM - Free Report) Diagnostics arm is transitioning from a traditional testing business into a highly differentiated, AI-powered clinical intelligence platform. The business delivered a strong and accelerating performance in 2025, emerging as one of the company’s primary growth engines.
The Diagnostics segment delivered robust growth across its core areas, with Oncology volumes rising 26% year over year and Hereditary volumes increasing 29%. One of the standout areas was minimal residual disease (MRD), which recorded an exceptional 56% sequential growth for the fourth quarter of 2025, highlighting both strong demand and early-stage market penetration.
Tempus expects the Diagnostics business to maintain strong momentum in 2026, particularly within oncology, where growth is projected to around 30% range. Several factors are expected to drive this continued expansion. First, the adoption of genomic sequencing in oncology continues to rise structurally, supporting sustained volume growth across both solid tumor and liquid biopsy testing. Second, MRD is anticipated to become a major catalyst as reimbursement improves and the company expands its commercial efforts, unlocking a large addressable market that is currently underpenetrated.
Another important growth factor for 2026 is pricing expansion. Average selling prices (ASPs), which were approximately $1,640 in fourth-quarter 2025, are expected to experience $500 upside over time. This uplift can be attributed to the transition to FDA-approved versions of key assays, improved payer coverage and a favorable shift in product mix.
Peer Update
Guardant Health’s (GH - Free Report) oncology segment remained strong in 2025, delivering 26% annual revenue growth driven by a 34% increase in test volumes, led by Guardant360 and the rapid adoption of Reveal (MRD). The screening segment, anchored by the Shield blood-based cancer screening test, completed its first full year of commercialization, generating $79.7 million in revenues and approximately 87,000 tests, supported by high patient adherence and strong early demand.
In 2026, the oncology segment is projected to grow 25-27%, driven by continued strong momentum across its core products. Guardant360 Liquid is expected to benefit from increasing adoption of Smart Platform applications and Guardant360 Tissue is likely to sustain its growth trajectory, building on the recent Smart Platform upgrade. Screening is projected to more than double, driven by commercial scale-up, partnerships, and potential guideline inclusion, making it the fastest-growing segment.
In 2025, Myriad Genetics’ (MYGN - Free Report) hereditary and tumor profiling businesses showed steady and improving momentum, supported by strong execution and growing clinical adoption. Key products like MyRisk continued to gain share, with double-digit growth in both affected and unaffected populations, reflecting rising demand for risk assessment and preventive screening.
In 2026, the hereditary cancer segment is expected to grow in the high single-digit range, driven by improved EMR-enabled patient identification, continued expansion in provider adoption, and sustained commercial execution. In tumor profiling, key catalysts include the launch of AI-enabled Prolaris in second-quarter 2026 and the early-stage rollout of Precise MRD.
TEM Stock Outperforms Industry & Benchmark
Over the past year, Tempus AI’s shares have lost 4.2% compared with the industry’s 28.1% decline. The S&P 500 composite has improved 16% over the said period.
Image Source: Zacks Investment Research
Discounted Valuation
TEM currently trades at a forward 12-month Price-to-Sales (P/S) of 4.80X compared with the industry median of 7.79X.
Image Source: Zacks Investment Research
TEM Stock Estimate Trend
Over the past 30 days, Tempus AI's loss per share estimate for 2026 has widened 2 cents.
Image Source: Zacks Investment Research
TEM stock currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.