Last Updated: 19 Sep 2024
Executive Summary
Tempus AI, Inc. (TEM) is a healthcare technology company that provides artificial intelligence-powered solutions for precision medicine and drug discovery. The company's platform combines genomic data, clinical data, and machine learning to enable personalized treatment plans and accelerate drug development.
Despite strong revenue growth, Tempus AI remains unprofitable and faces challenges in achieving profitability in the near term. However, the company's innovative technology and strategic partnerships position it well for long-term growth in the rapidly expanding precision medicine market.
Company Overview
Tempus AI was founded in 2015 and is headquartered in Chicago, Illinois. The company's mission is to use technology to advance the fight against cancer and other complex diseases. Tempus AI's platform, known as the Tempus Operating System (OS), integrates genomic data, clinical data, and machine learning to provide actionable insights for healthcare providers and researchers.
Tempus AI has partnerships with leading healthcare institutions, including the Mayo Clinic, University of California, San Francisco, and Dana-Farber Cancer Institute. These partnerships provide the company with access to a vast amount of data, which it uses to train and improve its machine learning algorithms.
Fundamental Analysis
Financial Performance:
Revenue: $595.57 million in the trailing twelve months (TTM)
Gross Profit: $0
Net Income: -$648.78 million
EPS: -$11.55
Revenue Growth: 0.253% YoY
Valuation:
Market Capitalization: $7.92 billion
Price-to-Sales Ratio (TTM): 13.29
Price-to-Book Ratio: 80.57
Profitability:
Tempus AI is currently unprofitable, with a net income margin of -1.21% and an operating margin of -3.214%. The company's expenses are primarily related to research and development, sales and marketing, and general and administrative costs.
Growth Prospects:
Tempus AI operates in the rapidly growing precision medicine market, which is expected to reach $184.3 billion by 2026. The company's innovative technology and strategic partnerships position it well to capture a significant share of this market.
Technical Analysis
Chart Patterns:
The stock has been trading in a range between $45 and $55 since October 2022.
The 50-day moving average is currently at $47.34, and the 200-day moving average is at $43.58.
The stock is currently trading above both moving averages, indicating a bullish trend.
Indicators:
The relative strength index (RSI) is at 58.5, indicating that the stock is in overbought territory.
The moving average convergence divergence (MACD) is bullish, with the MACD line above the signal line.
Short Term Outlook
Technically, Tempus AI is in a bullish trend and could continue to move higher in the short term. However, the stock is overbought and could experience a pullback before resuming its uptrend.
Long Term Outlook
The long-term outlook for Tempus AI is positive. The company's innovative technology and strategic partnerships position it well to capture a significant share of the rapidly growing precision medicine market. However, the company's profitability remains a concern, and investors should monitor its progress in this area.
Analyst Recommendations
Analysts are generally bullish on Tempus AI, with 8 out of 9 analysts rating the stock as a "buy" or "strong buy." The average analyst price target is $45.86, implying a potential upside of 10.6% from the current price.
