Tempus AI (NASDAQ:TEM) Shares Gap Up - Still a Buy?

Key Points

• Tempus AI shares surged: The stock opened at $55.98 versus a prior close of $49.36 and last traded around $56.41, with more than 4.5 million shares changing hands.
• Analyst sentiment remains mixed: Nine analysts rate the stock Buy, six Hold, and two Sell, resulting in a consensus Hold rating and an average price target of $64.92.
• Revenue growth is encouraging, but losses persist: Quarterly revenue rose 21.6% year over year to $382.5 million and EPS beat estimates, though the company reported a negative net margin and analysts expect a full-year loss of $1.38 per share. Insiders have also sold about $33.3 million of shares over the past three months.

Tempus AI, Inc. (NASDAQ:TEM - Get Free Report) gapped up prior to trading on Wednesday . The stock had previously closed at $49.36, but opened at $55.98. Tempus AI shares last traded at $56.4130, with a volume of 4,514,591 shares.

Wall Street Analysts Forecast Growth

Several research firms have commented on TEM. Wolfe Research started coverage on Tempus AI in a research note on Tuesday, June 2nd. They set a "peer perform" rating for the company. Stifel Nicolaus lowered their target price on shares of Tempus AI from $60.00 to $50.00 and set a "hold" rating on the stock in a research note on Monday, August 3rd. Needham & Company LLC reissued a "buy" rating and issued a $75.00 price target on shares of Tempus AI in a research note on Friday, July 31st. BTIG Research lowered their price target on shares of Tempus AI from $80.00 to $70.00 and set a "buy" rating on the stock in a research report on Monday, August 3rd. Finally, Freedom Capital upgraded shares of Tempus AI to a "hold" rating in a report on Tuesday, June 30th. Nine analysts have rated the stock with a Buy rating, six have issued a Hold rating and two have issued a Sell rating to the company. According to MarketBeat, Tempus AI currently has a consensus rating of "Hold" and an average target price of $64.92.

Tempus AI Price Performance

The stock has a market cap of $10.69 billion, a PE ratio of -41.15 and a beta of 3.58. The stock's fifty day moving average is $51.86 and its 200-day moving average is $51.18. The company has a debt-to-equity ratio of 3.06, a current ratio of 3.30 and a quick ratio of 3.16.

Tempus AI (NASDAQ:TEM - Get Free Report) last posted its earnings results on Thursday, July 30th. The company reported ($0.04) earnings per share for the quarter, beating the consensus estimate of ($0.14) by $0.10. Tempus AI had a negative net margin of 17.77% and a negative return on equity of 50.28%. The company had revenue of $382.49 million for the quarter, compared to analyst estimates of $379.69 million. During the same period in the previous year, the business posted ($0.22) EPS. Tempus AI's revenue was up 21.6% on a year-over-year basis. As a group, equities analysts anticipate that Tempus AI, Inc. will post -1.38 EPS for the current year.

Insiders Place Their Bets

In other Tempus AI news, Director Jennifer A. Doudna sold 2,673 shares of Tempus AI stock in a transaction on Thursday, June 25th. The stock was sold at an average price of $55.00, for a total value of $147,015.00. Following the sale, the director owned 25,942 shares in the company, valued at $1,426,810. The trade was a 9.34% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Eric P. Lefkofsky sold 250,000 shares of the company's stock in a transaction on Tuesday, July 28th. The shares were sold at an average price of $42.06, for a total value of $10,515,000.00. Following the completion of the transaction, the chief executive officer directly owned 200,000 shares in the company, valued at approximately $8,412,000. This trade represents a 55.56% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last three months, insiders have sold 684,424 shares of company stock valued at $33,255,565. Insiders own 24.26% of the company's stock.

Institutional Inflows and Outflows

Hedge funds have recently bought and sold shares of the stock. JPL Wealth Management LLC acquired a new position in shares of Tempus AI in the 3rd quarter worth approximately $26,000. Los Angeles Capital Management LLC acquired a new stake in Tempus AI in the 4th quarter valued at approximately $27,000. Harvest Fund Management Co. Ltd acquired a new stake in Tempus AI in the 3rd quarter valued at approximately $38,000. Whittier Trust Co. raised its holdings in shares of Tempus AI by 190.0% in the 1st quarter. Whittier Trust Co. now owns 870 shares of the company's stock valued at $41,000 after buying an additional 570 shares during the period. Finally, EverSource Wealth Advisors LLC boosted its holdings in Tempus AI by 88.8% during the 2nd quarter. EverSource Wealth Advisors LLC now owns 691 shares of the company's stock valued at $44,000 after acquiring an additional 325 shares during the period. Hedge funds and other institutional investors own 24.22% of the company's stock.

Tempus AI Company Profile

Tempus is a technology-driven healthcare company that applies artificial intelligence and machine learning to clinical and molecular data in order to advance precision medicine. Its primary focus lies in oncology, where the company offers comprehensive genomic profiling, digital pathology services and data-driven insights to inform personalized cancer care. By integrating DNA and RNA sequencing with structured clinical information, Tempus enables clinicians and researchers to identify targeted treatment options for patients based on the genetic characteristics of their tumors.

The company's core offering centers on a scalable, cloud-based analytics platform that aggregates vast amounts of molecular and clinical data.

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