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Should You Retain Tempus AI Stock In Your Portfolio Now?
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Key Takeaways
Tempus AI posted strong diagnostics growth, led by Oncology and Hereditary volume gains.
TEM's Data and Applications revenues rose 40.5%, aided by expanded deals with Merck and Gilead.
TEM reported a $125.9M net loss as stock-based compensation and other costs remained high.
Tempus AI (TEM - Free Report) is well poised for growth in the coming quarters due to its diagnostics volume growth and expanding data partnerships. However, large GAAP losses and multi-thread execution demands can sustain volatility for investors.
Over the past year, this Zacks Rank #3 (Hold) company’s shares have lost 29.4% compared with the industry’s 33% decline. The S&P 500 composite has gained 29.4% over the same period.
The healthcare technology company has a market capitalization of $9.08 billion. The company’s debt to equity ratio was 2.96 compared with the industry’s 0.00. TEM’s earnings surpassed estimates in three of the trailing four quarters and missed on one occasion. The last earnings surprise was 38.10%.
Tailwinds for TEM Stock
Durable Diagnostics Momentum: The first-quarter 2026 results extend the growth profile across Oncology and Hereditary. Diagnostics revenues were up 34.7% year over year, driven by Oncology volume growth of 28% and Hereditary volume rise of 54%. MRD volume was about 6,500 tests in the quarter, up roughly 500% year over year, showing that newer categories can scale even as reimbursement expands more gradually. If the company sustains oncology momentum while normalizing hereditary growth, it can keep building leverage in the diagnostics base.
Expanding Data Monetization: Data and Applications growth re-accelerated in the first quarter of 2026 and continues to be supported by larger enterprise relationships. Revenues totaled $87 million, up 40.5% year over year, with Insights up 44.1%, reflecting continued demand for data licensing and modeling.
Management highlighted a new multi-year collaboration with Merck and an expanded Lens agreement with Gilead. It described quarterly bookings more than $100 million with Total Contract Value rising. The company also reported $378.4 million of remaining performance obligations tied to limited multi-year contracts, with about half expected to be recognized over the next year. As these agreements mature, data conversion can remain a steady contributor even if recognition timing is uneven.
Headwinds for TEM Stock
GAAP Losses Remain Elevated: Tempus is moving closer to breakeven on an adjusted basis, but GAAP results remain deeply negative and can swing with non-operating items. In the first quarter, net loss was $125.9 million and included $56.3 million of stock-based compensation and related employer payroll taxes plus $32.3 million of unrealized losses on marketable securities. Stock-based compensation was $52.7 million, showing that equity expense remains a high quarterly cost even as revenues grow. The timeline to GAAP profitability remains less transparent and can weigh on valuation if losses persist at scale.
Execution Complexity Across Competitive Markets and Product Scope: Tempus is advancing multiple initiatives, including pricing migrations, MRD reimbursement expansion, continued oncology growth and scaling newer software and imaging tools. Management noted hereditary growth slowed in the first quarter as comps normalized. It expects a return to mid-teens growth later in the year, which adds a pacing element to the diagnostics mix.
Image Source: Zacks Investment Research
MRD is still in an early reimbursement rollout and the company has not fully unleashed its broader sales effort, which can limit near-term scale benefits. At the same time, higher cloud and software costs and ongoing product development can compete with near-term margin goals if execution slips.
TEM Stock Estimate Trend
In the past 30 days, the Zacks Consensus Estimate for the company’s 2026 loss per share has moved north 1 cent at 34 cents.
The Zacks Consensus Estimate for 2026 revenues is pegged at $1.59 billion, suggesting a 25.2% rise from the year-ago reported number.
Top MedTech Stocks
Some better-ranked stocks in the broader medical space are Globus Medical (GMED - Free Report) , Integra LifeSciences (IART - Free Report) and Phibro Animal Health (PAHC - Free Report) .
Globus Medical has an earnings yield of 5.5%, well ahead of the industry’s negative 3% yield. Its earnings surpassed estimates in each of the trailing four quarters, the average surprise being 26.3%. The company’s shares have rallied 43.8% against the industry’s 4.8% decline over the past year.
Integra LifeSciences, carrying a Zacks Rank #2 at present, has an earnings yield of 16% against the industry’s negative 3% yield. Shares of the company have gained 22.8% compared with the industry’s 4.8% growth. IART’s earnings topped estimates in each of the trailing four quarters, the average surprise being 16.8%.
Phibro Animal Health, carrying a Zacks Rank #2 at present, has an earnings yield of 9.2% compared with the industry’s 2.8% yield. Shares of the company have climbed 43.1% against the industry’s 27.9% decline. PAHC’s earnings beat estimates in each of the trailing four quarters, the average surprise being 16.3%.
View the Zacks #1 Rank List
Image: Bigstock
Should You Retain Tempus AI Stock In Your Portfolio Now?
Key Takeaways
Tempus AI (TEM - Free Report) is well poised for growth in the coming quarters due to its diagnostics volume growth and expanding data partnerships. However, large GAAP losses and multi-thread execution demands can sustain volatility for investors.
Over the past year, this Zacks Rank #3 (Hold) company’s shares have lost 29.4% compared with the industry’s 33% decline. The S&P 500 composite has gained 29.4% over the same period.
The healthcare technology company has a market capitalization of $9.08 billion. The company’s debt to equity ratio was 2.96 compared with the industry’s 0.00. TEM’s earnings surpassed estimates in three of the trailing four quarters and missed on one occasion. The last earnings surprise was 38.10%.
Tailwinds for TEM Stock
Durable Diagnostics Momentum: The first-quarter 2026 results extend the growth profile across Oncology and Hereditary. Diagnostics revenues were up 34.7% year over year, driven by Oncology volume growth of 28% and Hereditary volume rise of 54%. MRD volume was about 6,500 tests in the quarter, up roughly 500% year over year, showing that newer categories can scale even as reimbursement expands more gradually. If the company sustains oncology momentum while normalizing hereditary growth, it can keep building leverage in the diagnostics base.
Expanding Data Monetization: Data and Applications growth re-accelerated in the first quarter of 2026 and continues to be supported by larger enterprise relationships. Revenues totaled $87 million, up 40.5% year over year, with Insights up 44.1%, reflecting continued demand for data licensing and modeling.
Management highlighted a new multi-year collaboration with Merck and an expanded Lens agreement with Gilead. It described quarterly bookings more than $100 million with Total Contract Value rising. The company also reported $378.4 million of remaining performance obligations tied to limited multi-year contracts, with about half expected to be recognized over the next year. As these agreements mature, data conversion can remain a steady contributor even if recognition timing is uneven.
Headwinds for TEM Stock
GAAP Losses Remain Elevated: Tempus is moving closer to breakeven on an adjusted basis, but GAAP results remain deeply negative and can swing with non-operating items. In the first quarter, net loss was $125.9 million and included $56.3 million of stock-based compensation and related employer payroll taxes plus $32.3 million of unrealized losses on marketable securities. Stock-based compensation was $52.7 million, showing that equity expense remains a high quarterly cost even as revenues grow. The timeline to GAAP profitability remains less transparent and can weigh on valuation if losses persist at scale.
Execution Complexity Across Competitive Markets and Product Scope: Tempus is advancing multiple initiatives, including pricing migrations, MRD reimbursement expansion, continued oncology growth and scaling newer software and imaging tools. Management noted hereditary growth slowed in the first quarter as comps normalized. It expects a return to mid-teens growth later in the year, which adds a pacing element to the diagnostics mix.
Image Source: Zacks Investment Research
MRD is still in an early reimbursement rollout and the company has not fully unleashed its broader sales effort, which can limit near-term scale benefits. At the same time, higher cloud and software costs and ongoing product development can compete with near-term margin goals if execution slips.
TEM Stock Estimate Trend
In the past 30 days, the Zacks Consensus Estimate for the company’s 2026 loss per share has moved north 1 cent at 34 cents.
The Zacks Consensus Estimate for 2026 revenues is pegged at $1.59 billion, suggesting a 25.2% rise from the year-ago reported number.
Top MedTech Stocks
Some better-ranked stocks in the broader medical space are Globus Medical (GMED - Free Report) , Integra LifeSciences (IART - Free Report) and Phibro Animal Health (PAHC - Free Report) .
Globus Medical has an earnings yield of 5.5%, well ahead of the industry’s negative 3% yield. Its earnings surpassed estimates in each of the trailing four quarters, the average surprise being 26.3%. The company’s shares have rallied 43.8% against the industry’s 4.8% decline over the past year.
GMED carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Integra LifeSciences, carrying a Zacks Rank #2 at present, has an earnings yield of 16% against the industry’s negative 3% yield. Shares of the company have gained 22.8% compared with the industry’s 4.8% growth. IART’s earnings topped estimates in each of the trailing four quarters, the average surprise being 16.8%.
Phibro Animal Health, carrying a Zacks Rank #2 at present, has an earnings yield of 9.2% compared with the industry’s 2.8% yield. Shares of the company have climbed 43.1% against the industry’s 27.9% decline. PAHC’s earnings beat estimates in each of the trailing four quarters, the average surprise being 16.3%.