Key Takeaways
- JPMorgan reduced Tempus AI’s price target to $60 from $80, maintaining a “neutral” stance
- Fourth-quarter revenue surged 83% year-over-year, reaching $367.2 million and exceeding forecasts
- Company projects approximately $1.59B in 2026 revenue, representing roughly 25% expansion
- Company insiders offloaded approximately 596,035 shares valued at ~$37.5M in the last three months
- Several analysts maintain Buy recommendations, with consensus price target averaging $80.92
Shares of Tempus AI (TEM) declined Wednesday following JPMorgan Chase’s decision to reduce its price objective from $80 down to $60, while maintaining its “neutral” stance. This revised target suggests potential upside of approximately 10.85% from the stock’s latest closing price.
TEM shares declined $3.82 to close at $54.13 during Wednesday trading, with volume reaching 6.6 million shares — exceeding its typical daily average of 5.7 million.
JPMorgan wasn’t alone in adjusting expectations. Stifel similarly reduced its price objective from $85 to $60, maintaining a “Hold” rating. The firm acknowledged that revenue figures aligned with pre-announced results and highlighted the company’s strong positioning in oncology, but cited uncertainty around profitability as justification for the downward revision.
BTIG reduced its target from $105 to $90 while maintaining a “buy” recommendation. HC Wainwright adjusted from $98 to $89, also preserving its “buy” rating. The consensus price target among all covering analysts now stands at $80.92, with eight analysts recommending buy, five at hold, and one suggesting sell.
Some firms remain optimistic. Mizuho initiated coverage on February 19 with an “outperform” rating and set a $100 price target. Canaccord Genuity’s Kyle Mikson upheld a “buy” rating with an $80 target, highlighting robust revenue momentum and increasing pharmaceutical sector demand. Needham also reaffirmed its “buy” rating with a $75 target.
Fourth Quarter Performance Exceeded Expectations, But Profit Path Unclear
Tempus AI reported fourth-quarter revenue of $367.2 million, representing an 83% year-over-year increase and surpassing analyst projections. The adjusted loss per share came in at $0.04, significantly better than the anticipated $0.20 loss.
Diagnostics revenue drove performance, reaching $266.9 million — representing a 121.6% year-over-year increase. Oncology test volumes expanded 29% while Hereditary volumes grew 23%. Data and Applications revenue totaled $100.4 million, up 25.1%.
Despite these impressive figures, shares fell more than 3% in after-hours trading following the earnings release. Market participants focused on management’s failure to provide a definitive timeline for achieving full-year profitability and a 2026 revenue projection of ~$1.59B that barely exceeded consensus estimates.
The company recorded negative EBITDA of $150.55 million over the trailing twelve months. Wall Street analysts don’t anticipate profitability arriving in 2026.
Significant Insider Share Sales Draw Attention
Insider transaction activity has been substantial. Throughout the previous 90 days, company insiders divested 596,035 shares with an approximate value of $37.5 million.
EVP Andrew Polovin disposed of 10,949 shares on February 20 at an average price of $60.31, totaling $660,334. CEO Ryan Fukushima sold 9,592 shares on February 19 at $59.05, generating proceeds of $566,407. Despite these sales, insiders maintain ownership of 26.27% of the company.
Institutional investors and hedge funds collectively own 24.22% of TEM. Multiple smaller investment funds established new stakes during the third and fourth quarters, though at relatively limited scale.
The stock has traded between $36.22 and $104.32 over the past 52 weeks. The 50-day moving average sits at $61.92 while the 200-day moving average stands at $73.59. Market capitalization totals $9.63 billion, with a debt-to-equity ratio of 2.45 and beta of 5.22.
Stifel indicated continued interest in TEM at present levels, observing that it trades at a discount compared to oncology diagnostics sector peers, although InvestingPro data suggests the stock appears overvalued relative to calculated fair value.
