In a report released yesterday, Tejas Savant from Morgan Stanley maintained a Buy rating on Tempus AI, Inc. Class A (TEM – Research Report), with a price target of $60.00.
Tejas Savant has given his Buy rating due to a combination of factors including Tempus AI’s solid performance in their clinical oncology segment, which saw a significant year-over-year revenue increase. This growth was primarily driven by an improvement in average reimbursement per clinical oncology report, despite a slight decline in genotyping revenue from their Atlanta lab. The company’s Data & Services segment also showed robust growth, particularly in the Insights business, which experienced a substantial year-over-year increase.
Additionally, Tempus AI’s adjusted gross margin exceeded expectations, indicating strong operational efficiency, especially in the Data & Services business. Although there were some near-term challenges in the retail and CRO segments, the long-term growth thesis remains strong, supported by increased guidance for 2025 and favorable pricing dynamics in their xT-CDx and xF reimbursement rates. The recent acquisition of Ambry is expected to contribute to growth, with a long-term growth expectation remaining intact, further justifying the Buy rating.
In another report released on February 25, Loop Capital Markets also maintained a Buy rating on the stock with a $74.00 price target.
Based on the recent corporate insider activity of 74 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of TEM in relation to earlier this year.