Investing.com -- JP Morgan downgraded Tempus AI to Neutral from Overweight given concerns over stock’s valuation after a sharp stock rally which was driven by the company’s solid fourth-quarter performance and improved 2025 guidance.
The brokerage raised its price target on Tempus AI to $55 from $50 but said shares are now fully valued relative to peers.
Tempus AI maintained its outlook for 30% year-over-year growth in its core business and raised its 2025 revenue forecast to $1.24 billion, including its recent Ambry acquisition. The company also projected $5 million in adjusted EBITDA for the year, up from prior expectations of breaking even.
JP Morgan noted that ASP tailwinds in genomics and strong data and services growth contributed to Tempus AI’s outlook but said the stock's 106% year-to-date gain, driven partly by AI-related headlines and retail interest, pushed its valuation to about 11 times estimated 2025 sales, well above the diagnostics sector average of six times.
Brokerage noted that “the most prominent headline was President Trump’s announcement on January 21st of a $500B private sector AI infrastructure investment.”
In addition to Stargate headlines, TEM shares were propelled by news of Nancy Pelosi purchasing ~$50-100k worth of TEM call options with a strike price of $20.
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