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Wondering if Tempus AI at around US$47.82 is starting to look interesting, or if the stock still carries more risk than reward for you.
The stock has risen 3.0% over the past week and 4.2% over the past month, although it is still down 23.3% year to date and has fallen 32.9% over the past year.
Recent coverage has focused on Tempus AI as part of the broader conversation around AI in healthcare and life sciences, with investors weighing its long term potential against ongoing execution risks. This context has kept attention on the stock as sentiment shifts between optimism about AI adoption and caution about how quickly that potential might translate into fundamentals.
On Simply Wall St’s valuation checks, Tempus AI has a score of 3 out of 6. This sets up a closer look at how different valuation approaches view the stock today and hints at a more comprehensive way to think about its value later in this article.
Find out why Tempus AI’s -32.9% return over the last year is lagging behind its peers.
Approach 1: Tempus AI Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow, or DCF, model estimates what a stock could be worth by projecting the company’s future cash flows and discounting them back to today’s value.
For Tempus AI, the latest twelve month free cash flow is a loss of $225.6m. Analysts and Simply Wall St projections indicate free cash flow moving from an estimated $58.7m loss in 2026 to a projected $443.3m in 2030, with further cash flows beyond that extrapolated in the model. All cash flows are in $ and use a 2 Stage Free Cash Flow to Equity framework.
On this basis, the model arrives at an estimated intrinsic value of about $88.82 per share. Compared with a recent share price around $47.82, the DCF output implies the stock trades at roughly a 46.2% discount to this estimate, which points to material upside if the projections and assumptions hold.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Tempus AI is undervalued by 46.2%. Track this in your watchlist or portfolio, or discover 44 more high quality undervalued stocks.
TEM Discounted Cash Flow as at Jun 2026
Approach 2: Tempus AI Price vs Sales
For companies that are still working toward consistent profitability, the P/S ratio is often more useful than P/E because it compares what you are paying to the revenue the business is already generating, rather than earnings that may still be volatile or negative.
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Growth expectations and risk usually drive where a “normal” or “fair” sales multiple should sit. Higher growth and perceived resilience often support a higher P/S, while higher risk or weaker growth can point to a lower one.
Tempus AI currently trades on a P/S of 6.29x. This sits above the Life Sciences industry average P/S of 3.72x and above the peer average of 3.64x, so on simple comparisons the stock is priced at a higher sales multiple than many peers.
Simply Wall St’s Fair Ratio for Tempus AI is 7.14x P/S. This is a proprietary estimate of what P/S might be reasonable, given factors such as earnings growth, profit margins, industry, market cap and key risks. Because it blends these company-specific inputs, it can give a more tailored view than broad industry or peer averages.
Comparing the Fair Ratio of 7.14x with the current 6.29x indicates that, on this metric, the stock screens as undervalued.
Result: UNDERVALUED
NasdaqGS:TEM P/S Ratio as at Jun 2026
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Upgrade Your Decision Making: Choose your Tempus AI Narrative
Earlier it was mentioned that there is an even better way to understand valuation. Narratives take the story you believe about Tempus AI, link it to specific forecasts for revenue, earnings and margins, and then translate that into a Fair Value you can compare with the current share price.
On Simply Wall St’s Community page, Narratives are an accessible tool used by millions of investors to connect a company’s business story to the numbers in a structured way. This allows you to quickly see whether your view points to Tempus AI being above or below your own Fair Value line and decide if that means buy, hold or sell for you.
Narratives update automatically as fresh information arrives, such as new partnerships, earnings or FDA decisions, so your Fair Value view is not frozen; it adjusts as the story and data change.
For example, one Tempus AI Narrative on the Community page uses assumptions that lead to a Fair Value of about US$35 per share, while a more optimistic Narrative uses different growth and margin expectations and arrives at roughly US$105. This shows how reasonable investors looking at the same stock can reach very different conclusions about what it is worth today.
Do you think there’s more to the story for Tempus AI? Head over to our Community to see what others are saying!
NasdaqGS:TEM 1-Year Stock Price Chart
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.
Companies discussed in this article include TEM.
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