TEM Stock Forecast & Price Target

Tempus AI Inc has demonstrated a robust financial performance, with total revenue growing by 84.7% year-over-year, largely fueled by a significant 117.2% increase in genomics revenue to $252.9 million. The company is also positioned for further revenue growth through anticipated higher average selling prices (ASPs) for its xF liquid biopsy assay and xT CDx test, which currently command prices of $3,288 and $4,500, respectively. Additionally, an expected increase in pharmaceutical contracts for its data and services business suggests a positive trajectory for future earnings, particularly in light of the 31.7% year-over-year growth in oncology testing revenue.

Tempus AI Inc. has experienced a notable decline in gross margins in its Data & Other segment, dropping from 76.8% in 3Q24 to 69.7% in Q3, raising concerns about profitability. The company continues to face significant risks such as lower-than-projected sales growth, regulatory hurdles, and challenges in customer acquisition, all of which could hinder its ability to achieve sustainable profitability. Additionally, Tempus has reported substantial operating losses, incurred debt, and a significant decrease in operating cash flow, which may impede its financial stability moving forward.