Tempus AI Stock Surges 43% in Q1: Buy Now or Wait for Earnings?

Core Viewpoint - Tempus AI, Inc. is set to report its first-quarter fiscal 2025 results, with expectations of a revenue of $248.08 million and a loss of 27 cents per share, reflecting a steady consensus estimate over the past 90 days [2][3]. Financial Performance - In the last reported quarter, Tempus AI had an adjusted loss of 18 cents, which was wider than the Zacks Consensus Estimate of a loss of 15 cents per share, with an average negative earnings surprise of 6.46% over the trailing three quarters [1]. - The company experienced a 43% gain in stock price during the first quarter of 2025, outperforming the broader industry gain of 2.1% and the S&P 500 decline of 4.9% [4][5]. Growth Drivers - The Genomics unit is expected to report strong growth, building on over 30% growth in the previous quarter, while Data and Services revenues are anticipated to have accelerated by 44.6% year over year [10]. - Strategic acquisitions, including Ambry Genetics for $600 million and Deep 6 AI, are expected to enhance Tempus's capabilities in diagnostics and data analytics, contributing positively to financial performance [11][18]. EBITDA and Cash Flow - Tempus AI reported an adjusted EBITDA of -$7.8 million in the fourth quarter of 2025, marking a $27.3 million year-over-year improvement, with expectations of positive adjusted EBITDA of $5 million for the full year 2025 [12]. - The cumulative operating cash outflow improved to $189 million at the end of the fourth quarter of 2024, down from $214.3 million a year ago, indicating a trend towards positive cash flow [13]. Long-term Prospects - The company is advancing precision medicine through AI applications, with a focus on creating Intelligent Diagnostics to enhance personalized care and accelerate therapeutic development [14]. - The launch of the AI-enabled personal health concierge app, olivia, positions Tempus to benefit from the shift towards patient-centric healthcare [15]. - The FDA approval of the xT CDx test strengthens Tempus's oncology portfolio, likely increasing demand for its diagnostic services [16]. Market Position and Valuation - Tempus AI's stock is currently trading at a forward price-to-sales ratio of 6.81, which is higher than the industry average of 5.15, indicating an expensive valuation compared to peers [20]. - Despite the high valuation, the AI market's projected exponential growth positions Tempus AI to capitalize on expanding opportunities in the healthcare sector [21].