TEM: Future Profit Margins Will Expand As Federal Oncology Program Catalysts Mature

Narrative Update on Tempus AI Analyst Price Target

Analysts have slightly raised their price target on Tempus AI to approximately 91 dollars and 42 cents from 91 dollars, citing a marginally lower perceived risk profile and stable long term growth and profitability assumptions.

What's in the News

• Tempus received FDA 510(k) clearance for its RNA based xR IVD sequencing assay, expanding its toolkit for drug development partners and strengthening its position as a comprehensive precision oncology platform (FDA filing).
• The company raised its 2025 revenue guidance to about 1.265 billion dollars, implying roughly 80 percent year over year growth, while flagging higher quarterly losses tied to the Paige acquisition (company guidance).
• Tempus was selected by ARPA H to provide testing and CRO services for the ADAPT precision oncology program, integrating its AI enabled diagnostics and data infrastructure into a high profile federal cancer initiative (ARPA H program announcement).
• A new multi year collaboration with Whitehawk Therapeutics will apply Tempus multimodal real world data to design biomarker driven trials for an ADC oncology portfolio targeting PTK7, MUC16, and SEZ6 (company collaboration announcement).
• Tempus announced multiple upcoming research presentations at SITC 2025 and SABCS 2025, highlighting new multi omic algorithms, tumor mutational burden analytics, and breast cancer stratification studies that may broaden future biomarker and immunotherapy applications (conference abstracts).

Valuation Changes

• Fair Value: Risen slightly from approximately 91 dollars to about 91 dollars and 42 cents, reflecting a modest increase in intrinsic value estimates.
• Discount Rate: Fallen slightly from about 7.97 percent to roughly 7.94 percent, implying a marginally lower perceived risk profile.
• Revenue Growth: Essentially unchanged at around 26.94 percent, indicating stable long term growth assumptions.
• Net Profit Margin: Edged down slightly from roughly 15.51 percent to about 15.50 percent, suggesting a negligible adjustment in long run profitability expectations.
• Future P/E: Risen slightly from about 64.0 times to roughly 64.3 times, pointing to a marginally higher valuation multiple applied to future earnings.