Earnings Update: Here's Why Analysts Just Lifted Their Tempus AI, Inc. (NASDAQ:TEM) Price Target To US$64.11

Shareholders in Tempus AI, Inc. (NASDAQ:TEM) had a terrible week, as shares crashed 27% to US$62.26 in the week since its latest annual results. Revenues of US$693m were in line with expectations, although statutory losses per share were US$6.23, some 12% smaller than was expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Tempus AI

Taking into account the latest results, the most recent consensus for Tempus AI from seven analysts is for revenues of US$1.24b in 2025. If met, it would imply a major 78% increase on its revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 70% to US$1.39. Before this earnings announcement, the analysts had been modelling revenues of US$1.23b and losses of US$1.36 per share in 2025. So it's pretty clear consensus is mixed on Tempus AI after the new consensus numbers; while the analysts held their revenue numbers steady, they also administered a modest increase to per-share loss expectations.

Although the analysts are now forecasting higher losses, the average price target rose 9.4% to 58.6, which could indicate that these losses are expected to be "one-off", or are not anticipated to have a longer-term impact on the business. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Tempus AI at US$74.00 per share, while the most bearish prices it at US$50.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Tempus AI shareholders.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Tempus AI's growth to accelerate, with the forecast 78% annualised growth to the end of 2025 ranking favourably alongside historical growth of 30% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.9% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Tempus AI to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Tempus AI going out to 2027, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 3 warning signs for Tempus AI you should be aware of, and 1 of them is a bit unpleasant.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.