Tempus AI, Inc. (TEM) Down 5.4% — Time to Fold This Position?
Tempus AI, Inc. (TEM) extended its slide in Friday's session, dropping 5.40% and shedding $3.32 to close at $58.18 on the NASDAQ. The move keeps the stock well below the trajectory it held earlier in the year and puts it in uncomfortable proximity to the lower end of its 52-week range of $41.73 to $104.32. TEM reached its 52-week high on October 9, 2025, and now sits roughly 44% below that peak — a distance that reflects how significantly sentiment has deteriorated over the past several months.
Trading volume for the session came in at approximately 1.79 million shares, a sharp contrast to the 90-day average of roughly 6.02 million. The dramatically lighter-than-usual turnover suggests the selling pressure was not accompanied by a broad wave of conviction — but the absence of meaningful buying interest in a low-volume session does little to inspire confidence in a near-term stabilization.
Why Tempus AI, Inc. Price is Moving Lower
Today's decline reflects a confluence of pressures that have been building since Tempus AI reported its Q4 results in March 2026. The company missed adjusted EPS estimates, posting a loss of $0.18 per share against the $0.16 consensus expectation, while revenue of $200.7 million — though up 36% year over year — still fell short of analyst forecasts. That combination of a headline growth number that cannot clear the bar and a bottom line that continues to worsen is precisely the scenario that tends to erode confidence in high-multiple, loss-making names. Management's full-year guidance added to the disappointment: projected adjusted EBITDA of just $5 million versus the approximately $6 million the market anticipated, alongside revenue guidance of $1.24 billion that offered only a marginal beat relative to expectations.
The valuation problem compounds the fundamental picture. TEM trades at a price-to-sales ratio of roughly 6.3x — well above life sciences peers clustered near 3.6x to 3.7x — leaving little margin for error when guidance underwhelms. Non-GAAP operating expenses climbed 6.5% year over year to $142.5 million in the most recent quarter as the company continued expanding its salesforce and R&D footprint, pressuring margins further at a time when the market has little patience for spending acceleration without a credible path to profitability. The most recent quarter also showed sequential revenue erosion, with Q1 2026 coming in at $348.12 million versus $367.21 million in Q4 2025 — a quarter-over-quarter decline of 5.2% that raises additional questions about demand trajectory. Significant insider selling over the past three months and analyst price target reductions — blended targets have retreated to approximately $72.40 — have further soured the investment case, leaving the stock down roughly 22% to 26% year to date heading into today's session.
What is the Tempus AI, Inc. Rating - Should I Sell?
Weiss Ratings assigns TEM an E rating. The rating was downgraded on 3/20/2026. Current recommendation is Sell.
The sub-index breakdown explains the downgrade with precision. Revenue growth of 36.12% is a genuine headline, but it earns only a Weak Growth Index — a sobering signal that the pace of expansion, while impressive in absolute terms, is not translating into the kind of scalable, durable business model that justifies the current valuation. The negative profit margin of -22.20% drives the Very Weak Efficiency Index, reflecting a company that is spending well ahead of what it collects and has not demonstrated a credible near-term path to changing that equation. With the company described as not forecast to be profitable within three years and a forward P/E of -35.79 rendering traditional earnings-based valuation meaningless, the efficiency picture is one of the clearest red flags in the profile.
The Solvency Index stands out as the lone bright spot — rated Good — suggesting that balance sheet liquidity and debt positioning are not the immediate concern. That matters insofar as it reduces the risk of a near-term capital crisis, but solvency alone cannot offset ongoing cash consumption at the operating level. The Weak Total Return Index and Weak Volatility Index round out the picture, confirming that shareholders have not been rewarded for holding the stock and that meaningful price swings remain a persistent feature of trading in TEM — not an occasional occurrence.
Within the Health Care sector, Tempus AI ranks well below peers that are themselves facing headwinds. Danaher Corporation (DHR, D+) and Lonza Group AG (LZAGF, D+) carry D+ ratings — poor in their own right, but a step above TEM's position at the bottom of the ratings scale. Revolution Medicines, Inc. (RVMD, D-) and Natera, Inc. (NTRA, D-) sit closer to TEM's level, underscoring that this corner of Health Care is broadly under pressure — but TEM's E grade still marks it as the weakest name in this peer group.
About Tempus AI, Inc.
Tempus AI, Inc. (TEM) is a Health Care technology company headquartered in Chicago, Illinois, focused on using artificial intelligence and multimodal data to advance precision medicine. The company operates the Tempus platform, a closed-loop, full-stack system that connects clinicians directly to laboratory diagnostics, an analytics engine, and a deep repository of clinical, molecular, and imaging data. Physicians interact with the platform through Hub, an end-to-end clinical application designed to streamline next-generation sequencing workflows, while life sciences customers and researchers access Lens, a software application built for precision research and drug discovery collaboration.
The diagnostics business is central to Tempus's operations, encompassing NGS diagnostics, PCR profiling, anatomic and molecular pathology, and large-panel solid and hematologic tumor testing through its xT and xR assays. The company also offers pharmacogenomic testing through its nP assay, targeting patients with psychiatric conditions including depression and bipolar disorder, as well as genetic testing for inherited conditions. Beyond diagnostics, Tempus provides Insights — a data licensing product that gives external partners access to de-identified clinical and molecular datasets — alongside Trials, a clinical trial matching service, and Organoids, a tumor-derived biological modeling capability.
Tempus has built a network of strategic collaborations that strengthens its commercial and scientific positioning, including partnerships with AstraZeneca, GlaxoSmithKline, Merck, Pathos AI, and Recursion Pharmaceuticals, as well as a collaboration with Blood Cancer United focused on pediatric acute myeloid leukemia. These relationships provide both revenue visibility and validation of the platform's utility in drug development and precision oncology workflows. The breadth of the technology stack — spanning diagnostics, AI-driven analytics, data licensing, and clinical trial services — differentiates Tempus from single-modality competitors, though translating that platform breadth into sustained profitability remains the defining challenge for the business.
Investor Outlook
Tempus AI, Inc. (TEM) carries a Weiss Rating of E (Sell), reflecting a fundamental profile marked by persistent losses, a premium valuation disconnected from near-term earnings prospects, and deteriorating analyst sentiment. Investors should watch for any meaningful improvement in quarterly profitability metrics or a shift in management's EBITDA guidance trajectory — either could serve as the first signal that the thesis is evolving. Until then, the combination of insider selling, margin pressure, and a sequential revenue decline in the most recent quarter warrants caution. See full rankings of all E-rated Health Care stocks inside the Weiss Stock Screener.
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