Tempus AI (TEM) stock is in focus after CellCarta Inc. added the company as the second commercial laboratory partner in its CDx Commercialization Lab Network for oncology companion diagnostics.
See our latest analysis for Tempus AI.
The CellCarta agreement has arrived alongside a sharp shift in momentum for Tempus AI, with the share price up 24.09% over the last day and a 30 day share price return of 26.52%, yet the 1 year total shareholder return has declined 16.42%. This suggests that recent optimism is still working against a weaker longer term record.
If you see opportunity in Tempus AI’s role in healthcare AI, it can be worth scanning similar ideas across the sector with our screener of 42 healthcare AI stocks
Bulls see Tempus AI’s CellCarta partnership and rising revenue as the start of a rerating. Bears point to ongoing losses and a weak 1 year return. Which case does today’s valuation lean toward next?
Most Popular Narrative: 7.1% Undervalued
Tempus AI's most followed narrative sets a fair value of $65.90 per share, compared with the last close at $61.25, which casts the recent rebound in a different light.
This data moat is what makes the business interesting.
Tempus has accumulated tens of millions of de-identified patient records and hundreds of petabytes of clinical and molecular data, assets that would take competitors years and enormous investment to replicate.
According to QuanD, the narrative focuses on Tempus AI growing into its data asset. Revenue expansion, margin uplift, and a richer earnings multiple are central to the case. Curious which assumptions carry the biggest weight in that $65.90 fair value and how sensitive the case is to slower growth or softer profitability?
Result: Fair Value of $65.90 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, Tempus AI still carries risks, including ongoing net losses of US$254.4m and a share price that has fallen 16.4% over the past year.
Find out about the key risks to this Tempus AI narrative.
Another View on Tempus AI’s Valuation
The user narrative leans on a future earnings multiple and concludes Tempus AI is 7.1% undervalued at a fair value of $65.90. Our DCF model points to a much larger gap, with Tempus AI at $61.25 compared with an estimated future cash flow value of $107.42, also suggesting undervaluation. Which signal do you put more weight on?
Look into how the SWS DCF model arrives at its fair value.
Next Steps
Sentiment on Tempus AI is mixed, with both clear risks and real positives. Move quickly, review the underlying numbers, then weigh the 2 key rewards and 2 important warning signs
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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