Key Takeaways
- JPMorgan reduced Tempus AI’s price objective from $80 down to $60 while keeping a “neutral” stance
- Fourth-quarter revenue soared 83% compared to last year, reaching $367.2 million and exceeding projections
- Management 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 maintained Buy recommendations, with a mean consensus price objective of $80.92
Shares of Tempus AI (TEM) declined Wednesday following JPMorgan Chase’s decision to reduce its price objective on the healthcare technology company from $80 down to $60, while maintaining a “neutral” stance. The revised target suggests potential upside of approximately 10.85% based on the stock’s latest closing price.
TEM shares retreated $3.82 to close at $54.13 during Wednesday’s trading session, with volume reaching 6.6 million shares — exceeding the typical average of 5.7 million.
JPMorgan wasn’t alone in adjusting expectations. Stifel similarly reduced its price objective from $85 down to $60, maintaining a “Hold” designation. The investment bank acknowledged that revenues aligned with previously disclosed figures and the oncology business appears favorably positioned, though cited uncertain profitability metrics as justification for the adjustment.
BTIG reduced its objective from $105 to $90 while preserving a “buy” recommendation. HC Wainwright adjusted from $98 down to $89, also maintaining “buy.” The mean consensus price objective among all covering analysts currently stands at $80.92, with eight analysts assigning buy ratings, five holding neutral positions, and one recommending sell.
Not all analysts are turning pessimistic. Mizuho initiated coverage February 19 with an “outperform” designation and $100 price objective. Canaccord Genuity analyst Kyle Mikson kept a “buy” stance with an $80 target, highlighting robust revenue momentum and increasing pharmaceutical sector demand. Needham similarly reaffirmed “buy” with a $75 objective.
Fourth Quarter Results Exceeded Expectations, Yet Profitability Concerns Linger
Tempus AI reported fourth-quarter revenue of $367.2 million, representing an 83% year-over-year increase and surpassing analyst forecasts. The company’s adjusted loss totaled $0.04 per share, significantly better than the anticipated $0.20 loss.
Diagnostics revenue drove performance, reaching $266.9 million — a 121.6% year-over-year surge. Oncology testing volumes increased 29% while Hereditary volumes expanded 23%. Data and Applications revenue climbed to $100.4 million, advancing 25.1%.
Despite these positive figures, shares fell more than 3% during after-hours trading following the earnings announcement. Market participants focused on management’s failure to provide a definitive timeline toward full-year profitability and 2026 revenue guidance of ~$1.59B that failed to significantly exceed Street expectations.
Over the trailing twelve-month period, the company recorded negative EBITDA of $150.55 million. Wall Street analysts don’t anticipate profitability arriving in 2026.
Significant Insider Selling Activity Draws Attention
Insider transaction activity has been substantial. During the previous 90 days, company insiders disposed of 596,035 shares valued at approximately $37.5 million.
EVP Andrew Polovin divested 10,949 shares February 20 at an average price of $60.31, generating proceeds of $660,334. CEO Ryan Fukushima sold 9,592 shares February 19 at $59.05, totaling $566,407. Insiders collectively maintain 26.27% ownership of the company.
Institutional investors and hedge funds control 24.22% of TEM. Multiple smaller investment firms established new positions during Q3 and Q4, albeit at relatively limited scale.
The stock’s 52-week trading range extends from $36.22 to $104.32. The 50-day moving average currently sits at $61.92 while the 200-day rests at $73.59. Market capitalization stands at $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 valuation levels, observing that shares trade at a discount compared to oncology diagnostics sector peers, although InvestingPro identifies the stock as overvalued relative to estimated fair value.
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