Tempus AI Today
(As of 12/20/2024 at 05:45 PM ET)
- 52 week range
- $22.89
▼
$79.49
- Price target
- $56.00
In mid-August, about two months into using Tempus AI Nasdaq: TEM For its initial public offering (IPO), the stock is up an impressive 93%. However, shares have seen extreme volatility and are now 8% below the opening price of $37 as of the December 18 close.
Overall, Wall Street analysts seem to think stocks have fallen too far. The average price target suggests shares could rise 74% from their December 18 closing price. The Guggenheim’s recently released $74 price target is particularly bullish. It indicates a double uptrend. So, does the decline in Tempus share price represent an opportunity to enter a bearish phase? I will provide a brief overview of Tempus AI’s business, the progress it has made since going public and provide my overall take on the name.
Tempus: AI-driven genetic and data cancer testing
Tempus AI is a healthcare company that helps in the fight against cancer. It does this by performing genetic tests and looking for mutations and other abnormalities in the genetic code. Cancer arises from human cells deviating from their normal processes. This deviation is often caused by changes in a person’s DNA, as these are the instructions that organize cells. By detecting genetic abnormalities, the company can find early signs of cancer.
Through genetic testing conducted by the company, it has developed a huge database of genetic data. The company also integrates patient data from free sources and healthcare providers. The company uses artificial intelligence to analyze all this data. It aims to improve the insights of its tests and create personalized recommendations for each patient. It also sells its data to drug developers, helping them improve preclinical discovery and clinical trial design.
Financial results and Embry acquisition show strength
The company splits its revenue between genetic tests, data, and the services it sells. Tempus generated revenue from running tests initially. Tempus can then sell that data to drug developers. Over time, revenue generated from the sale of test data It becomes several times larger From initial testing revenue.
Last quarter, genomic testing revenue represented 64% of total revenue. However, 64% growth rate of data and services revenues It was three times higher than Genome’s 20% revenue growth rate. The growth rate of data and services has accelerated significantly, while the growth rate of genomics has slowed slightly. In the last quarter, overall revenues grew at a rapid and accelerating pace of 33%.
Tempus AI stock forecast today
$56.00
57.57% upModerate purchase
Based on 12 analyst ratings
| High expectations | $74.00 |
|---|---|
| Average expectations | $56.00 |
| Low expectations | $44.00 |
Tempus AI stock forecast details
Initial guidance from Tempus calls for revenue growth of 24% in 2025. The company also expects its adjusted earnings before taxes, depreciation and amortization (EBITDA) to turn positive. Much of this will come from the strongly positive EBITDA of Ambry Genetics, which is acquired by Tempus. The slow growth rate is also largely due to Ambry’s relatively slower growth rate compared to Tempus’ core business. The deal is scheduled to close in the first quarter of 2025.
Tempus aims to expand its capabilities in the field of hereditary cancer testing through this acquisition. Ambry also performs testing in other areas, such as rare diseases, cardiology and reproductive health. This deal does several positive things for Tempus. It increases the number and types of tests that Tempus can manage. This will bring a greater amount of data to the Tempus platform as Ambry tests about 400,000 patients a year. Over time, Tempus can sell this data to generate revenue many times greater than the revenue generated from the tests. The company will also likely be able to find new drug developers to sell its data that works on diseases other than cancer.
Additionally, 95% of Amrby’s testing volume comes from being an in-network provider. Tempus tests are largely off-network. This means that patients face significant out-of-pocket costs. Tempus can leverage Amrby relationships to gain more coverage within the network. This would make patients access to Tempus tests less expensive, expanding its market. This may already be working. The company announced on December 18 that it Agreements signed within the network With many health care organizations.
Tempus AI stock appears poised for a recovery
Overall, Tempus appears to be getting stronger, but its value is stagnant. The vast amount of data the company possesses and its ability to collect more gives it a strong competitive advantage in this field. To me, it looks like the stock is poised for a big rebound. However, post-IPO this stock will likely continue to be highly volatile, which is a key consideration.
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