Tempus Could Gain Share In AI Health Care Market Poised To Grow By Over 30%
Tempus AI Inc (NASDAQ:TEM) announced last week it was granted advanced diagnostic laboratory test status for its next-generation sequencing assay.
These analysts provide their initial takeaways from the stock.
BofA Securities On Tempus
Analyst Michael Ryskin initiated coverage with a Buy rating and price target of $41.
Providing AI-enabled precision medicine, Tempus brings "the power of advanced technology to healthcare and diagnostics" and delivers personalized therapy decisions, Ryskin said in his initiation note.
"This platform is being monetized as a diagnostic offering and by leveraging the power of the database to Biopharma partners," he added. Tempus serves a large total addressable market (TAM) of at least $70 billion and has achieved "impressive scale in a short period of time," maintaining a growth rate of more than 20% in sales, the analyst further stated.
Check out other analyst stock ratings.
Needham On Tempus
Analyst Ryan MacDonald began coverage with a Buy rating and price target of $47.
Tempus created an "unmatched, 200-petabyte, multimodal dataset that helps oncologists provide better care for patients and life sciences companies create finely targeted therapies to drive better outcomes," MacDonald wrote in a note.
He added that the company could gain share in a TAM estimated to be nearly $200 billion and drive a long-term CAGR (compounded annual growth rate) of more than 30%. The company is likely to generate gross margin expansion, driven by its "margin-accretive data revenue," the analyst further said.
Stifel On Tempus
Analyst Daniel Arias initiated coverage with a Buy rating and price target of $45.
The company's portfolio of diagnostic and data services is "uniquely synergistic within itself" and generated insights that benefit oncologists and biopharma companies developing cancer drugs, Arias said.
"Profitability is still a work in progress, but improving gross margins and expectations for balanced spending put a cross-over into positivity on the not-too-distant horizon — with a positive cash generation in 2026," he further wrote.
TEM Price Action: Shares of Tempus had declined by 1.75% to $32.62 at the time of publication on Tuesday.
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Photo: Tempus lab, courtesy of Tempus