Key Highlights
- JPMorgan reduced Tempus AI’s price target to $60 from $80 while keeping a “neutral” stance
- Fourth-quarter revenue surged 83% compared to the prior year, reaching $367.2 million and exceeding forecasts
- Management projects approximately $1.59B in revenue for 2026, representing roughly 25% expansion
- Company insiders divested approximately 596,035 shares valued at around $37.5M during the previous 90 days
- Several analysts maintained Buy recommendations, with consensus target averaging $80.92
Tempus AI (TEM) experienced a decline on Wednesday following JPMorgan Chase’s decision to reduce its price objective from $80 down to $60 while maintaining a “neutral” stance on the healthcare AI company. The revised target suggests potential upside of approximately 10.85% based on the stock’s most recent closing price.
TEM declined $3.82 to reach $54.13 during Wednesday’s trading session, with volume hitting 6.6 million shares — exceeding its typical daily average of 5.7 million.
JPMorgan’s adjustment came alongside similar moves from other firms. Stifel reduced its objective from $85 down to $60 while maintaining a “Hold” stance. The firm acknowledged that revenues aligned with previously disclosed figures and recognized strong positioning of the oncology portfolio, yet cited unclear profitability indicators as justification for the downward revision.
BTIG adjusted its target downward from $105 to $90 while preserving a “buy” recommendation. HC Wainwright revised from $98 to $89, also maintaining “buy.” The consensus target across all covering analysts currently stands at $80.92, with eight analysts assigning buy ratings, five at hold, and one at sell.
Several analysts remain optimistic. Mizuho initiated coverage on February 19 with an “outperform” designation and a $100 price objective. Canaccord Genuity’s Kyle Mikson sustained a “buy” rating with an $80 target, highlighting robust top-line momentum and increasing pharmaceutical sector demand. Needham also reaffirmed “buy” with a $75 target.
Strong Q4 Performance Met with Profitability Questions
Tempus AI delivered fourth-quarter revenue of $367.2 million, representing an 83% increase compared to the same period last year and surpassing analyst projections. The adjusted per-share loss totaled $0.04, significantly better than the $0.20 loss analysts had anticipated.
Diagnostics revenue drove performance, climbing to $266.9 million — a 121.6% year-over-year increase. Oncology test volumes expanded 29% while Hereditary volumes advanced 23%. Data and Applications revenue achieved $100.4 million, marking 25.1% growth.
Despite these strong metrics, shares fell more than 3% during after-hours trading following the earnings announcement. Market participants focused on the absence of a definitive timeline toward achieving full-year profitability and a 2026 revenue projection of approximately $1.59B that failed to substantially exceed Wall Street estimates.
Across the trailing twelve months, the company recorded negative EBITDA of $150.55 million. Analyst projections indicate profitability will remain elusive in 2026.
Significant Insider Divestment Activity
Insider transactions have been substantial. During the past 90 days, company insiders divested 596,035 shares with an aggregate value of approximately $37.5 million.
EVP Andrew Polovin divested 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. Company insiders maintain ownership of 26.27% of the business.
Hedge funds and institutional investors control 24.22% of TEM. Multiple smaller investment funds established new positions during the third and fourth quarters, although at relatively limited scale.
The stock’s 52-week trading range extends from $36.22 to $104.32. The 50-day moving average registers at $61.92 while the 200-day average sits at $73.59. Current market capitalization stands at $9.63 billion, with a debt-to-equity ratio of 2.45 and a beta of 5.22.
Stifel indicated continued interest in TEM at present valuation levels, observing that the stock trades at a discount relative to oncology diagnostics sector peers, although InvestingPro characterizes the stock as overvalued compared to its calculated fair value.
