Key Highlights
- Q1 revenue reached $348.1M, growing 36.1% from the prior year and surpassing analyst projections of $345.4M
- Adjusted earnings loss of $0.13 per share outperformed the $0.20 consensus estimate, though GAAP loss expanded to $0.70 per share
- 2026 revenue forecast updated to $1.59–$1.60B, with the midpoint aligning closely with Wall Street’s $1.592B expectation
- Shares declined 7.2% during extended trading hours following a regular session close of $54.07
- Wall Street analysts hold a “Moderate Buy” rating with a mean price target of $71.36
Tempus AI (TEM) delivered better-than-anticipated revenue and adjusted earnings figures for its first quarter, yet shares tumbled 7.2% during after-hours trading on Tuesday as investors reacted to conservative annual projections.
The healthcare technology company generated $348.1 million in revenue during the three months ending March 31, reflecting a 36.1% increase from the comparable year-ago period and topping Street estimates of $345.4 million. Shares finished regular trading at $54.07 before declining in extended hours.
On an adjusted basis, the per-share loss totaled $0.13, outperforming the consensus forecast of $0.20. However, GAAP results showed a deeper loss of $0.70 per share, falling short of analyst projections.
The quarterly net loss expanded to $125.9 million compared with $68.0 million during the first quarter of 2025. This figure incorporated $56.3 million in equity-based compensation expenses alongside $32.3 million in unrealized losses from marketable securities holdings.
The Diagnostics division generated $261.1 million, representing a 34.7% annual increase. Oncology test volumes advanced 28%, while minimal residual disease testing experienced explosive growth of approximately 500% year-over-year, reaching roughly 6,500 tests.
Data and Applications revenue climbed 40.5% to $87.0 million. The Insights component within this division posted 44.1% growth. The quarter marked the third consecutive period where bookings exceeded the $100 million threshold.
Gross profit expanded 43.1% year-over-year to $222.0 million. Adjusted EBITDA showed improvement, narrowing to a $2.8 million loss from a $16.2 million loss in the prior-year quarter.
Annual Forecast Meets Low Expectations
Tempus updated its 2026 revenue projection to a range of $1.59–$1.60 billion, implying roughly 25% annual expansion. The $1.595 billion midpoint barely exceeded the analyst consensus of $1.592 billion, offering limited upside for investors to celebrate.
Management maintained its adjusted EBITDA forecast at approximately $65 million for the current year. Executives emphasized during the earnings call that the company requires no additional capital and anticipates free cash flow improvements during the second quarter.
Several operational headwinds emerged during the period. Hereditary testing experienced deceleration, though leadership projects a return to mid-teens percentage growth during the latter half of 2026. Reimbursement factors continue to influence the pace of MRD test adoption.
Wall Street Ratings and Insider Transactions
Corporate insiders have reduced their holdings recently. Over the past 90 days, insiders offloaded 563,471 shares valued at roughly $29.8 million. CAO Ryan Bartolucci and EVP Andrew Polovin were among executives who trimmed positions during February.
Analyst perspectives vary across Wall Street firms. Needham maintains a Buy recommendation with a $75 price objective. Morgan Stanley reduced its target from $85 down to $70 while preserving an Overweight stance. Guggenheim lowered its target from $95 to $60, keeping a Buy rating intact. Jefferies launched coverage with an Underperform designation and a $35 target.
The prevailing analyst consensus stands at “Moderate Buy” with a $71.36 average price target, representing substantial upside from current trading levels.
Institutional ownership has grown in recent months. Invesco expanded its holdings by more than 2,900%, while Royal Bank of Canada increased its position by 201%.
The stock has traded within a 52-week band spanning from $41.73 to $104.32, with the 200-day moving average positioned at $62.91.
