BTIG analyst Mark Massaro reiterated a Buy rating for Tempus AI, Inc. (NASDAQ:TEM) with a price target of $96 following the third-quarter FY25 earnings beat.
• TEM is under selling pressure. Get the complete analysis here.
Earnings Details
On Nov. 4, Tempus AI reported revenue of $334.21 million, topping analyst estimates of $328.73 million and marking an 84.7% increase from a year earlier.
The loss estimate of 17 cents was surpassed by the adjusted loss per share of 11 cents.
For FY25, the company raised its revenue guidance to $1.265 billion, up from a previous guide of $1.260 billion.
Analyst View
The analyst expects Tempus to secure additional pharma contracts for its data and services business.
The analyst expects average selling prices (ASPs) to rise as the mix shifts toward higher-priced tests, including the xT CDx at $4,500/test (up from $2,900 for xT LDT) and the xF liquid biopsy assay at $3,288/test (up from $2,919).
Expansion of commercial payor coverage for xF and xT CDx is expected, alongside continued development of TEM's algorithm business, says the analyst.
The analyst sees Tempus positioned at the convergence of several major trends: precision medicine and oncology (including liquid biopsies), AI and machine learning, and the move toward more personalized drug development and companion diagnostics for pharmaceutical companies.
TEM Price Action: TEM shares are down 2.74% at $82.18 at publication on Wednesday.
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