Analyst Daniel Brennan of TD Cowen maintained a Buy rating on Tempus AI, Inc. Class A (TEM – Research Report), retaining the price target of $62.00.
Daniel Brennan’s rating is based on Tempus AI, Inc.’s strong performance in the first quarter, where the company reported a 3% sales beat and better-than-expected gross margins and EBITDA. The core Genomics segment, particularly in pricing, and the recently acquired Ambry business were significant contributors to this performance. Despite a higher-than-anticipated cash burn, which was attributed to one-off factors expected to diminish in the following quarter, the overall financial outlook remains positive.
Additionally, Tempus AI, Inc. raised its 2025 sales guidance by $10 million, partly due to the recent Pathos deal, and reiterated its target of generating $5 million in adjusted EBITDA for 2025. The Genomics business, including Oncology, showed robust growth, with pricing improvements offsetting volume shortfalls. The transition to the FDA-approved CDx assay, which carries a higher price, is expected to enhance revenue further. These factors combined justify the Buy rating, as they indicate strong future growth potential for the company.
In another report released today, Needham also reiterated a Buy rating on the stock with a $70.00 price target.