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Tempus AI (TEM) is back in focus after announcing an expanded multi year collaboration with Merck that puts its de identified multimodal data and AI tools to work on Merck’s oncology and broader drug discovery efforts.
See our latest analysis for Tempus AI.
Despite the Merck collaboration and the February earnings and guidance update, momentum in Tempus AI’s share price has been weak. The 90 day share price return shows a decline of 32.17% and the year to date share price return shows a decline of 16.20%, although the 1 year total shareholder return stands at 6.44%.
If this healthcare AI story has your attention, it could be a good moment to see what else is out there through our screener of 32 healthcare AI stocks and compare opportunities.
With shares under pressure despite the Merck deal, slimmer losses, and analyst targets sitting above the current US$52.26 price, you have to ask: is Tempus AI on sale or is the market already pricing in future growth?
Against Tempus AI’s last close of $52.26, the most followed narrative pegs fair value at about $86.71. This frames the current discount as substantial and puts its precision oncology and AI tools at the center of the story.
Robust discipline in investment and operating leverage, as evidenced by rapid revenue growth paired with improving adjusted EBITDA and gross margins, supports near term profitability and strengthens the case for long term scalable earnings expansion.
Curious how this narrative gets to a higher fair value? It leans on strong top line assumptions, rising margins and a punchy future earnings multiple. The full breakdown sets out the numbers behind that view.
Result: Fair Value of $86.71 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, there are still clear pressure points, including intensifying competition in genomics and AI, and uncertainty around reimbursement that could cap revenue and margin ambitions.
Find out about the key risks to this Tempus AI narrative.
With sentiment clearly split between risks and rewards, this is a good time to review the numbers yourself and move quickly to shape your own view with 2 key rewards and 2 important warning signs.
If Tempus AI has you thinking more broadly about your portfolio, do not stop here. Use our tools to quickly spot other potential opportunities before the crowd catches on.