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Tempus AI Stock Before Q2 Earnings Release: To Buy or Not to Buy?
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Key Takeaways
{\"0\":\"TEM gained 34.5% in Q2, outperforming the sector and peers like TXG and SOPH.\",\"1\":\"A $200M AI partnership with AstraZeneca and Pathos is set to drive long-term data monetization for TEM.\",\"2\":\"Despite top-line strength, TEM\'s valuation premium and lack of profitability may weigh on near-term upside.\"}
In the last reported quarter, the company’s adjusted loss of 24 cents was narrower than the Zacks Consensus Estimate of a loss of 27 cents per share. Tempus AI, which went public in June 2024, exceeded estimates in two of the trailing four quarters and missed in two, the average negative earnings surprise being 2.07%.
The Zacks Consensus Estimate for revenues is currently pegged at $299.3 million for the second quarter, implying an 80.4% improvement over the year-ago period.
The Zacks Consensus Estimate for the second-quarter bottom line has narrowed by 4 cents to a loss of 23 cents per share over the past 90 days.
TEM's Earnings Estimate Revision Trend
Image Source: Zacks Investment Research
Throughout the second quarter of 2025, Tempus AI had an impressive run on the bourses with a 34.5% gain. Despite macroeconomic challenges, including escalating trade tensions that broadly impacted the healthcare technology sector, the company witnessed strong momentum, primarily driven by a series of strategic acquisitions and partnerships in the field of AI-driven precision medicine.
During this period, the company not only surpassed the 9.3% gain posted by the broader industry but also significantly outperformed the 3.4% decline of the Medical sector. The S&P 500 benchmark index gained 10.7% during this period. The company has also outperformed other players in the health infotech field, like 10x Genomics (TXG - Free Report) and SOPHiA GENETICS (SOPH - Free Report) . While TXG gained 33.5%, SOPH declined 2.3% during the said period.
Q2 Price Comparison
Image Source: Zacks Investment Research
Let’s see how things have shaped up for TEM shares prior to this announcement:
Key Factors to Note Prior to Tempus AI's Q2 Earnings
Tempus AI recently announced a three-year, $200 million foundational model partnership with AstraZeneca (AZN - Free Report) and Pathos, which is expected to have contributed to its second-quarter performance. This non-exclusive data licensing agreement aims to develop the world’s largest foundation model in oncology using over 300 petabytes of Tempus’ multimodal data. With the first version of the model expected in 9-12 months, the deal is already transforming Tempus AI’s data monetization trajectory. Management confirmed that revenues from this deal will be recognized ratably over the three-year term, starting in the second quarter.
Tempus AI’s hereditary testing segment, which contributed meaningfully to first-quarter growth, is expected to have maintained the trend this time too. When Tempus acquired Ambry Genetics, it guided mid-to-high teens growth, but the segment exceeded expectations with a 23% unit increase. While management has been cautious about projecting ongoing acceleration, they have also expressed confidence in the long-term potential for broader hereditary screening applications, ranging from cancer to cardiovascular and neurological risk.
Tempus continued to expand its diagnostics portfolio with the recent FDA clearance of ECG-Low EF, its second AI-powered ECG tool for detecting low ejection fraction, further strengthening its position in cardiology and extending its reach beyond oncology. Meanwhile, the company launched xM for TRM, a liquid biopsy assay for monitoring immunotherapy response, which showed promising early data at ASCO 2025. These likely contributed to the second-quarter top line too.
Tempus AI is advancing its digital health strategy by integrating Tempus One, its GenAI clinical assistant, into EHR systems, enabling physicians to query data, access guidelines and streamline workflows. The launch of Agent Builder for custom GenAI tools further deepens its role in clinical settings. Tempus One too is expected to have witnessed strong customer adoption during the second quarter.
However, despite strong top-line growth and product momentum, Tempus AI in 2025 is facing a few near-term challenges. The company remains unprofitable, with an adjusted EBITDA loss of $16.2 million in the first quarter. Though the loss narrowed year over year, it raised questions about the timeline to profitability amid ongoing R&D investments. Additionally, while the AstraZeneca-Pathos foundation model deal is significant, its revenues will be recognized ratably over three years, limiting short-term financial impact.
Further, investments tied to these updates, including product development, regulatory efforts, and marketing, are likely to have pushed operating expenses higher in the second quarter, putting some pressure on short-term profitability. Broader macroeconomic factors, like tariffs, hospital budget constraints and biotech funding trends, could also affect adoption rates.
Expensive Valuation
TEM’s stock is currently overvalued compared to its industry, as shown in the chart below.
TEM is currently trading at a forward 12-month price-to-sales (P/S) ratio of 6.86, a premium to the broader industry's average of 5.80X.
It also trades higher than other industry players like 10x Genomics (2.70X) and SOPHiA GENETICS (2.40X). However, the stock is trading below its one-year median of 8.00X, suggesting that it has moderated somewhat from its historical highs.
Image Source: Zacks Investment Research
Our Take
With the AI market projected to grow exponentially in the coming years, Tempus AI is well-positioned to capitalize on expanding opportunities. With a strong financial outlook and efforts to improve healthcare outcomes, TEM presents a unique opportunity for investors seeking high returns from the AI and healthcare sectors.
Yet, despite the company’s several recent upsides, its premium valuation and lack of near-term profitability are limiting this Zacks Rank #3 (Hold) stock’s near-term gains. While current shareholders should hold their positions, new investors should wait for the stock to retract some of its recent gains, providing a better entry point. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Tempus AI Stock Before Q2 Earnings Release: To Buy or Not to Buy?
Key Takeaways
Tempus AI, Inc. (TEM - Free Report) is scheduled to report second-quarter 2025 results on Aug. 8.
In the last reported quarter, the company’s adjusted loss of 24 cents was narrower than the Zacks Consensus Estimate of a loss of 27 cents per share. Tempus AI, which went public in June 2024, exceeded estimates in two of the trailing four quarters and missed in two, the average negative earnings surprise being 2.07%.
The Zacks Consensus Estimate for revenues is currently pegged at $299.3 million for the second quarter, implying an 80.4% improvement over the year-ago period.
The Zacks Consensus Estimate for the second-quarter bottom line has narrowed by 4 cents to a loss of 23 cents per share over the past 90 days.
TEM's Earnings Estimate Revision Trend
Image Source: Zacks Investment Research
Throughout the second quarter of 2025, Tempus AI had an impressive run on the bourses with a 34.5% gain. Despite macroeconomic challenges, including escalating trade tensions that broadly impacted the healthcare technology sector, the company witnessed strong momentum, primarily driven by a series of strategic acquisitions and partnerships in the field of AI-driven precision medicine.
During this period, the company not only surpassed the 9.3% gain posted by the broader industry but also significantly outperformed the 3.4% decline of the Medical sector. The S&P 500 benchmark index gained 10.7% during this period. The company has also outperformed other players in the health infotech field, like 10x Genomics (TXG - Free Report) and SOPHiA GENETICS (SOPH - Free Report) . While TXG gained 33.5%, SOPH declined 2.3% during the said period.
Q2 Price Comparison
Image Source: Zacks Investment Research
Let’s see how things have shaped up for TEM shares prior to this announcement:
Key Factors to Note Prior to Tempus AI's Q2 Earnings
Tempus AI recently announced a three-year, $200 million foundational model partnership with AstraZeneca (AZN - Free Report) and Pathos, which is expected to have contributed to its second-quarter performance. This non-exclusive data licensing agreement aims to develop the world’s largest foundation model in oncology using over 300 petabytes of Tempus’ multimodal data. With the first version of the model expected in 9-12 months, the deal is already transforming Tempus AI’s data monetization trajectory. Management confirmed that revenues from this deal will be recognized ratably over the three-year term, starting in the second quarter.
Tempus AI’s hereditary testing segment, which contributed meaningfully to first-quarter growth, is expected to have maintained the trend this time too. When Tempus acquired Ambry Genetics, it guided mid-to-high teens growth, but the segment exceeded expectations with a 23% unit increase. While management has been cautious about projecting ongoing acceleration, they have also expressed confidence in the long-term potential for broader hereditary screening applications, ranging from cancer to cardiovascular and neurological risk.
Tempus continued to expand its diagnostics portfolio with the recent FDA clearance of ECG-Low EF, its second AI-powered ECG tool for detecting low ejection fraction, further strengthening its position in cardiology and extending its reach beyond oncology. Meanwhile, the company launched xM for TRM, a liquid biopsy assay for monitoring immunotherapy response, which showed promising early data at ASCO 2025. These likely contributed to the second-quarter top line too.
Tempus AI is advancing its digital health strategy by integrating Tempus One, its GenAI clinical assistant, into EHR systems, enabling physicians to query data, access guidelines and streamline workflows. The launch of Agent Builder for custom GenAI tools further deepens its role in clinical settings. Tempus One too is expected to have witnessed strong customer adoption during the second quarter.
However, despite strong top-line growth and product momentum, Tempus AI in 2025 is facing a few near-term challenges. The company remains unprofitable, with an adjusted EBITDA loss of $16.2 million in the first quarter. Though the loss narrowed year over year, it raised questions about the timeline to profitability amid ongoing R&D investments. Additionally, while the AstraZeneca-Pathos foundation model deal is significant, its revenues will be recognized ratably over three years, limiting short-term financial impact.
Further, investments tied to these updates, including product development, regulatory efforts, and marketing, are likely to have pushed operating expenses higher in the second quarter, putting some pressure on short-term profitability. Broader macroeconomic factors, like tariffs, hospital budget constraints and biotech funding trends, could also affect adoption rates.
Expensive Valuation
TEM’s stock is currently overvalued compared to its industry, as shown in the chart below.
TEM is currently trading at a forward 12-month price-to-sales (P/S) ratio of 6.86, a premium to the broader industry's average of 5.80X.
It also trades higher than other industry players like 10x Genomics (2.70X) and SOPHiA GENETICS (2.40X). However, the stock is trading below its one-year median of 8.00X, suggesting that it has moderated somewhat from its historical highs.
Image Source: Zacks Investment Research
Our Take
With the AI market projected to grow exponentially in the coming years, Tempus AI is well-positioned to capitalize on expanding opportunities. With a strong financial outlook and efforts to improve healthcare outcomes, TEM presents a unique opportunity for investors seeking high returns from the AI and healthcare sectors.
Yet, despite the company’s several recent upsides, its premium valuation and lack of near-term profitability are limiting this Zacks Rank #3 (Hold) stock’s near-term gains. While current shareholders should hold their positions, new investors should wait for the stock to retract some of its recent gains, providing a better entry point. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.