Tempus AI (TEM) plunged Tuesday as its quarterly revenues missed expectations, days after insiders were reported as offloading the stock in big volumes. Shares tumbled as much as 14% after it posted revenue of $201 million in the Fiscal fourth quarter, which though up 35% year-on-year was below the estimate of $203 million. Its adjusted Q4 loss of $0.18 was a little worse than the $0.15 expected.
Insiders Dump TEM
Just over a week ago we reported that insiders had been dumping TEM stock as shares of the medical technology firm continued to notch a series of fresh all-time highs.
On the earnings call, CEO Eric Lipkovsky said the company had extended its Google (GOOGL) agreement for another five years. “It’s kind of an awesome win for us in that,” he said.
“We feel confident enough that we’re increasing our guidance for 2025,” he added, signalling that revenue growth is expected to grow. Annual revenue for 2024 increased 30.4% to $693.4 million. For 2025, the company expects revenue of $1.24 billion.
Tempus, which uses artificial intelligence to help gather and analyze clinical and molecular data from patients to improve treatment, may face challenges relating to the integration of the Ambry Genetics business it acquired earlier this month.
TEM stock had rallied to a record high $91.45 ahead on February 14th after the company announced a project to develop treatments for follicular lymphoma, a slow-growing cancer that affects the immune system. Previously it had gained momentum after Nancy Pelosi’s purchase of 50 TEM call options in January.
Analysts Remain Positive
Loop Capital analyst Mark Schappel raised the firm’s price target on Tempus AI to $74 from $52 and kept a Buy rating on the stock. He said the company’s results were consistent with its pre-announcement and is sticking to the view TEM is a play on the precision medicine trends sweeping through the healthcare industry. Needham analyst Ryan MacDonald also raised his price target and stuck to a Buy rating.
JPMorgan downgraded the stock to Neutral (Hold) from Overweight (Buy) with a price target of $55, saying the retail buying frenzy had left the shares fairly valued, even allowing for Tempus AI’s “unique combination” of diagnostics and data.
Is TEM a Good Stock to Buy?
Turning to Wall Street, TEM stock has a Moderate Buy consensus rating based on five Buys and four Holds assigned in the last three months. At $66.38, the average Tempus AI stock price target implies around 4% downside potential, though there may be further revisions after the earnings.
