The Tempus AI, Inc. (NASDAQ:TEM) First-Quarter Results Are Out And Analysts Have Published New Forecasts

A week ago, Tempus AI, Inc. (NASDAQ:TEM) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. It looks like a positive result overall, with revenues of US$256m beating forecasts by 3.1%. Statutory losses of US$0.40 per share were 3.1% smaller than the analysts expected, likely helped along by the higher revenues. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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After the latest results, the twelve analysts covering Tempus AI are now predicting revenues of US$1.25b in 2025. If met, this would reflect a major 55% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 61% to US$1.64. Before this latest report, the consensus had been expecting revenues of US$1.24b and US$1.29 per share in losses. So it's pretty clear the analysts have mixed opinions on Tempus AI even after this update; although they reconfirmed their revenue numbers, it came at the cost of a regrettable increase in per-share losses.

Check out our latest analysis for Tempus AI

As a result, there was no major change to the consensus price target of US$62.00, with the analysts implicitly confirming that the business looks to be performing in line with expectations, despite higher forecast losses. 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$70.00 per share, while the most bearish prices it at US$48.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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. It's clear from the latest estimates that Tempus AI's rate of growth is expected to accelerate meaningfully, with the forecast 79% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 43% over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.0% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Tempus AI is expected to grow much faster than its industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Tempus AI. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$62.00, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Tempus AI going out to 2027, and you can see them free on our platform here..

Plus, you should also learn about the 3 warning signs we've spotted with Tempus AI (including 1 which can't be ignored) .

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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.