Tempus AI (TEM): Evaluating Valuation Following ARPA-H Partnership and FDA Green Lights in Precision Medicine

Tempus AI (TEM) has been chosen by the U.S. Advanced Research Projects Agency for Health to support its ADAPT program. This highlights Tempus’s expanding role in adaptive, AI-driven cancer treatment, along with recent FDA clearances for its diagnostics.

See our latest analysis for Tempus AI.

Tempus AI’s year has been marked by an all-time high share price and a string of headline-making deals, from federal projects with ARPA-H to new FDA green lights and high-profile tech partnerships. The momentum is clear: investors have driven a 66.7% 3-month share price return, with a remarkable 181.4% year-to-date gain. The total return over the past year sits at 97.4% as the market anticipates continued growth beyond recent catalysts.

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But with shares hitting record highs and analysts setting price targets below the current level, the question remains: is Tempus AI undervalued by the market, or are investors already pricing in every bit of its future growth?

Most Popular Narrative: 24% Overvalued

With Tempus AI’s fair value estimate of $77.55 per share well below the recent closing price of $96.39, bullish market momentum is running far ahead of consensus expectations. The largest narrative sees enormous potential but cautions that the current price already reflects a future marked by rapid top-line and margin expansion.

Significant volume growth and market share gains in both oncology and hereditary/genetic testing indicate that Tempus AI is leveraging its expanding data repository and technological differentiation to outperform competitors, positioning the company for durable top-line revenue growth.

Read the complete narrative.

Want a glimpse behind the numbers powering this rich valuation? Analysts are betting on an aggressive ramp in revenue, improving profitability, and remarkable earnings progress. Discover which ambitious growth levers and industry forecasts are driving the consensus. The real surprise? Find out what profit assumptions underpin that eye-popping fair value when you read the full narrative.

Result: Fair Value of $77.55 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, rising competition and delayed reimbursement decisions could challenge Tempus AI’s growth story and put pressure on its ability to sustain margin improvements.

Find out about the key risks to this Tempus AI narrative.

Build Your Own Tempus AI Narrative

If you think there’s more to the story or want to reach your own conclusions, dive into the numbers yourself and craft a narrative in minutes. Do it your way

A great starting point for your Tempus AI research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.

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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.

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