Tempus AI, Inc. (NASDAQ:TEM) Just Reported And Analysts Have Been Lifting Their Price Targets

Last week, you might have seen that Tempus AI, Inc. (NASDAQ:TEM) released its third-quarter result to the market. The early response was not positive, with shares down 9.5% to US$70.43 in the past week. It looks like the results were pretty good overall. While revenues of US$412m were in line with analyst predictions, statutory losses were much smaller than expected, with Tempus AI losing US$0.08 per share. This is an important time for investors, as they can track a company’s performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. 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 19 analysts covering Tempus AI are now predicting revenues of US$1.98b in 2027. If met, this would reflect a substantial 31% improvement in revenue compared to the last 12 months. Per-share losses are expected to explode, reaching US$1.35 per share. Before this latest report, the consensus had been expecting revenues of US$1.97b and US$1.36 per share in losses.

View our latest analysis for Tempus AI

The average price target fell 10% to US$82.89, with the ongoing losses seemingly a concern for the analysts, despite the lack of real change to the earnings forecasts. 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$100.00 per share, while the most bearish prices it at US$50.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Tempus AI’s revenue growth is expected to slow, with the forecast 24% annualised growth rate until the end of 2027 being well below the historical 34% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.0% per year. So it’s pretty clear that, while Tempus AI’s revenue growth is expected to slow, it’s still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed 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. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn’t be too quick to come to a conclusion on Tempus AI. Long-term earnings power is much more important than next year’s profits. We have forecasts for Tempus AI going out to 2028, and you can see them free on our platform here.

You still need to take note of risks, for example – Tempus AI has 2 warning signs we think you should be aware of.

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