Does Tempus AI Stock Have More Room For Growth?

Tempus AI stock has surged 10% this past week, driven by strong quarterly results and a raised full-year sales outlook. The company now forecasts an 82% year-over-year rise in sales, reaching approximately $126 million. This recent jump contributes to a significant year-to-date rally, with shares up nearly 77%.

Given this positive momentum, many investors are wondering if Tempus AI stock is a good buy at around $60. Our analysis suggests that it is an attractive investment at its current price. We reached this conclusion after a detailed review of the company’s valuation, multi-year operational performance, and financial health. Tempus AI demonstrates strong operating performance and financial robustness across four key metrics: Growth, Profitability, Financial Stability, and Downturn Resilience.

That being said, if you seek an upside with less volatility than holding an individual stock, consider the High Quality Portfolio, which has outperformed the S&P and achieved returns exceeding 91% since its inception. Also, check out – The Trade Desk: Buy TTD Stock Now At $55?

Image by Tung Nguyen from Pixabay

Relevant Articles

1. The Next Big Rally in Ford Motor Stock Could Start Like This
2. The Risk Factors to Watch Out For in NVIDIA Stock
3. Intuitive Surgical Stock Now 16% Cheaper, Time To Buy
4. AT&T Stock Pays Out $85 Bil – Investors Take Note
5. Intel Stock Pays Out $92 Bil – Investors Take Note
6. Comcast Stock Capital Return Hits $44 Bil

---

How Does Tempus AI’s Valuation Look vs. The S&P 500?

Going by what you pay per dollar of sales or profit, TEM stock looks very expensive compared to the broader market.

• Tempus AI has a price-to-sales (P/S) ratio of 10.9 vs. a figure of 3.0 for the S&P 500
• That said, the company’s strong revenue growth explains this high multiple.

How Have Tempus AI’s Revenues Grown Over Recent Years?

Tempus AI’s Revenues have grown considerably over recent years.

• Tempus AI has seen its top line grow at an average rate of 53.6% over the last 3 years (vs. increase of 5.2% for S&P 500)
• Also, its quarterly revenues grew 89.6% to $315 Mil in the most recent quarter from $166 Mil a year ago (vs. 4.3% improvement for S&P 500)

How Profitable Is Tempus AI?

Tempus AI’s profit margins are considerably worse than most companies in the Trefis coverage universe.

• Tempus AI’s Operating Income over the last four quarters was $-235Mil, which represents a very poor Operating Margin of -25% (vs. 18.4% for S&P 500
• Tempus AI’s Operating Cash Flow (OCF) over this period was $-52 Mil, pointing to a very poor OCF Margin of -5% (vs. 19.8% for S&P 500)
• For the last four-quarter period, Tempus AI’s Net Income was $-200 Mil — indicating a very poor Net Income Margin of -21% (vs. 12.3% for S&P 500)

Does Tempus AI Look Financially Stable?

Tempus AI’s balance sheet looks very strong.

• Tempus AI’s Debt figure was $527 Mil at the end of the most recent quarter, while its market capitalization is $10 Bil (as of 8/10/2025). This implies a very strong Debt-to-Equity Ratio of 5% (vs. 24.1% for S&P 500). [Note: A low Debt-to-Equity Ratio is desirable]
• Cash (including cash equivalents) makes up $291 Mil of the $1.6 Bil in Total Assets for Tempus AI.  This yields a strong Cash-to-Assets Ratio of 17.9% (vs. 6.7% for S&P 500)

Putting All The Pieces Together: What It Means For TEM Stock

In summary, Tempus AI’s performance across the parameters detailed above are as follows:

• Growth: Very Strong
• Profitability: Very Weak
• Financial Stability: Very Strong
• Overall: Strong

Tempus AI has demonstrated strong performance across essential financial metrics. While its current valuation multiple is higher than the broader market, this is typical for fast-growing, technology-driven companies. For example, Doximity trades at 21 times revenue and Hinge Health at 10 times. Despite its strong rally this year, we believe TEM stock still has room for further upside.

However, significant risks exist. Our assessment could be wrong, as investors may be unwilling to assign a higher valuation to a company with a negative cash flow. Furthermore, Tempus AI is facing securities fraud claims regarding inflated contracts, self-funded deals, and undisclosed operational risks. These allegations could damage investor confidence.

In conclusion, investors should carefully consider these risks before investing in Tempus AI. As an alternative, consider the Trefis Reinforced Value (RV) Portfolio, which has outperformed its all-cap stocks benchmark (combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to produce strong returns for investors. Why is that? The quarterly rebalanced mix of large-, mid- and small-cap RV Portfolio stocks provided a responsive way to make the most of upbeat market conditions while limiting losses when markets head south, as detailed in RV Portfolio performance metrics.

Invest with Trefis Market-Beating Portfolios

See all Trefis Price Estimates