Tempus AI Down 13%—Is It Time to Buy?
Shares of Tempus AI (NASDAQ: TEM) are down over 13% after reporting its Q4 and full-year 2024 earnings.
- Despite showing strong revenue growth and narrower losses, the stock is taking a hit.
- Tempus AI missed both top and bottom-line expectations, disappointing investors.
The company reported 35.8% revenue growth in Q4, reaching $200.7 million, surpassing its own estimate of $200 million.
- However, it missed Wall Street’s forecast of $203 million.
- For the full year, Tempus reported $693.4 million in revenue, marking a 30% increase, reflecting solid growth in AI-driven precision medicine like genomics and data services.
- Gross profit surged to $122.1 million, showing a 49.7% margin, driven by strong growth in its data and services.
However, Tempus AI faces some concerns.
- The company posted a quarterly net loss of $13 million, which is an improvement from the $50.5 million loss last year, but still missed expectations.
- Adjusted losses were $0.18 per share, worse than the forecasted $0.15 to $0.17 per share loss.
- Tempus projected 2025 revenue of $1.24 billion, a massive 79% increase, but also forecasted adjusted EBITDA losses of $5 million, indicating high spending on research and acquisitions like the Ambry Genetics deal.
Tempus looks promising but remains risky.
- The company’s AI tools and healthcare partnerships have the potential for significant growth, but the earnings miss, ongoing losses, and high spending might continue to unsettle investors.
- Tempus will need to prove it can meet its 2025 goals and control costs to regain investor confidence.
After reaching a high of $95.11 per share earlier this month, Tempus AI has now fallen 36%.
- Even with this drop, TEM stock is still up 58% since its IPO last June at $37 per share.
Key Takeaway
- Nancy Pelosi’s investment in Tempus AI, purchasing 50 call options, brought the stock into the spotlight.
- Her track record of successful trades raises questions about the performance of politicians’ portfolios relative to the broader market.
- Pelosi’s returns of 70.9% in 2024 outperformed the S&P 500’s 24.9% and even beat Warren Buffett’s 20% annual returns.
- While Tempus AI shows potential, its financial risks and missed expectations suggest caution.