Value
6.9/10data confidence 33%| Component | Sub-score |
|---|---|
| P/S | 5.9 |
| Analyst target | 7.5 |
TEM · Why this verdict
Why Tempus AI (TEM) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score5.4/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Tempus AI delivers 36% revenue growth and has beaten earnings estimates in all four of the last four quarters with an average positive surprise of 27%, but carries a quality score of 3.2 — below the minimum threshold — with negative free cash flow, 31% short interest, and a 74% revenue concentration in oncology and hereditary testing.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Tempus AI has a quality score of 3.2, below the minimum 4.0 threshold, with negative free cash flow at negative 4% of revenue, zero reported return on equity, and zero net margin — indicating a cash-burning company that has not yet established a profitable business model despite strong revenue growth. Quality breakdown | Free cash flow turns positive and the quality score rises above 4.0 within the next 8 quarters, signaling the beginning of business model validation. | →Stable |
| CounterHealth information services companies with proprietary oncology data assets often operate at a loss while building data network effects; the 36% revenue growth and 4-quarter earnings beat streak suggest the business is scaling toward profitability, with each quarter's loss smaller than feared. | ||
Oncology and hereditary tests represent 74% of Tempus AI's revenue — combined with sole-supplier dependency for key inputs — creating a dual concentration risk where either a reimbursement change for oncology testing or a supplier disruption could materially impair revenues. Bear case | Oncology and hereditary test revenue share falls below 65% within 12 months as other service lines scale, or the segment grows faster than 30% year-over-year. | →Stable |
| CounterDeep oncology specialization is a competitive moat in precision medicine; the 74% concentration reflects intentional focus on a high-value market where Tempus has proprietary data advantage rather than an accidental dependency. | ||
Tempus AI has beaten earnings estimates in all four of the last four quarters with an average positive surprise of 27%, against a backdrop of 36% revenue growth — demonstrating that the company is consistently narrowing losses faster than analysts model even as it scales. Earnings | Earnings surprise stays above 15% in at least 3 of the next 4 quarters and revenue growth remains above 25% year-over-year. | →Stable |
| CounterBeating expectations on a negative earnings per share is a lower bar than beating on positive numbers; a 27% positive surprise on a small negative number can mask significant ongoing cash burn at the operating level. | ||
Short interest stands at 31% of the float — one of the highest levels in the dataset — with a justified-short-interest note in the risk analysis, reflecting broad institutional conviction that the current valuation does not reflect the risks of a cash-burning, concentrated healthcare data company. Key risks | Short interest falls below 20% of the float, more than 11 percentage points below the current 31%, as earnings beats reduce bearish conviction. | →Stable |
| CounterVery high short interest creates significant short-squeeze potential on positive catalysts; if the oncology data platform achieves a major partnership or reimbursement expansion, forced short covering could drive a sharp price increase. | ||
Tempus AI has a quality score of 3.2, below the minimum 4.0 threshold, with negative free cash flow at negative 4% of revenue, zero reported return on equity, and zero net margin — indicating a cash-burning company that has not yet established a profitable business model despite strong revenue growth.
→StableQuality breakdown
- Expectation
- Free cash flow turns positive and the quality score rises above 4.0 within the next 8 quarters, signaling the beginning of business model validation.
CounterHealth information services companies with proprietary oncology data assets often operate at a loss while building data network effects; the 36% revenue growth and 4-quarter earnings beat streak suggest the business is scaling toward profitability, with each quarter's loss smaller than feared.
Oncology and hereditary tests represent 74% of Tempus AI's revenue — combined with sole-supplier dependency for key inputs — creating a dual concentration risk where either a reimbursement change for oncology testing or a supplier disruption could materially impair revenues.
→StableBear case
- Expectation
- Oncology and hereditary test revenue share falls below 65% within 12 months as other service lines scale, or the segment grows faster than 30% year-over-year.
CounterDeep oncology specialization is a competitive moat in precision medicine; the 74% concentration reflects intentional focus on a high-value market where Tempus has proprietary data advantage rather than an accidental dependency.
Tempus AI has beaten earnings estimates in all four of the last four quarters with an average positive surprise of 27%, against a backdrop of 36% revenue growth — demonstrating that the company is consistently narrowing losses faster than analysts model even as it scales.
→StableEarnings
- Expectation
- Earnings surprise stays above 15% in at least 3 of the next 4 quarters and revenue growth remains above 25% year-over-year.
CounterBeating expectations on a negative earnings per share is a lower bar than beating on positive numbers; a 27% positive surprise on a small negative number can mask significant ongoing cash burn at the operating level.
Short interest stands at 31% of the float — one of the highest levels in the dataset — with a justified-short-interest note in the risk analysis, reflecting broad institutional conviction that the current valuation does not reflect the risks of a cash-burning, concentrated healthcare data company.
→StableKey risks
- Expectation
- Short interest falls below 20% of the float, more than 11 percentage points below the current 31%, as earnings beats reduce bearish conviction.
CounterVery high short interest creates significant short-squeeze potential on positive catalysts; if the oncology data platform achieves a major partnership or reimbursement expansion, forced short covering could drive a sharp price increase.
Per-dimension breakdown
Quality
3.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.0 |
| Gross margin | 8.7 |
| Op margin | 0.0 |
| Net margin | 0.0 |
| Current ratio | 9.7 |
| FCF quality | 0.0 |
| Moat | 5.8 |
| Piotroski F | 4.4 |
- ▸Cash-burning: FCF -4% of revenue
Growth
10.0/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
- ▸Strong growth: 36% YoY
Momentum
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 9.7 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 2.8 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -4.5%/30d — confirmed downtrend
Sentiment
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 8.4 |
| erm sentiment | 4.0 |
- ▸Analyst upside: 28%
Insider
3.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 2.0 |
| holder change | 5.0 |
- ▸Notable insider selling — $26,681,743 (0.306% of mkt cap)
Peer rank
2.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.5 |
| quality rank | 0.8 |
| growth rank | 7.5 |
Technical
1.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.9 |
| support resistance | 3.0 |
| 52w position | 0.0 |
Risk (lower is worse)
2.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 0.4 |
| days to cover | 5.9 |
| volatility | 0.0 |
| put call | 7.3 |
| implied vol | 0.0 |
| max pain risk | 3.0 |
| beta | 0.0 |
| debt equity | 1.8 |
- ▸High short interest justified: 31%
- ▸High IV: 83%
- ▸Above max pain $30
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 3.5 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (7)
- MOMENTUM:6.6>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:44d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:1.0<1.5@spot
Warning (1)
- DEATH_CROSS:momentum=6.6>=5.0 recovering
Reward-to-Risk
1.02
Upside
+15.3%
Downside
15.0%
Sizing output
AVOID
SetupRECOVERY — Death cross but MACD improving, RSI 57
EdgeNO_EDGE — No clear edge identified
SuitabilityAGGRESSIVE — Beta 3.62>1.3
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Growth at 10.0 could not lift the engine output above the verdict floor. Failed gate signal: ASYMMETRY:1.0<1.5@spot.
The strongest dimensions are Growth at 10.0, Catalyst at 7.1, and Value at 6.9; the weakest are Technical at 1.6, Risk (lower is worse) at 2.3, and Peer rank at 2.7. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 1.02 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Tempus AI has a quality score of 3.2, below the minimum 4.0 threshold, with negative free cash flow at negative 4% of revenue, zero reported return on equity, and zero net margin — indicating a cash-burning company that has not yet established a profitable business model despite strong revenue growth.
Trip ifFree cash flow burn rate worsens to below -10% of revenue, more than 6 percentage points worse than the current -4% level, in any reported quarter.
- P2Oncology and hereditary tests represent 74% of Tempus AI's revenue — combined with sole-supplier dependency for key inputs — creating a dual concentration risk where either a reimbursement change for oncology testing or a supplier disruption could materially impair revenues.
Trip ifOncology and hereditary test revenue share rises above 82%, more than 8 percentage points above the current 74%, indicating further concentration increase.
- P3Tempus AI has beaten earnings estimates in all four of the last four quarters with an average positive surprise of 27%, against a backdrop of 36% revenue growth — demonstrating that the company is consistently narrowing losses faster than analysts model even as it scales.
Trip ifEarnings surprise falls below 0% in at least 3 of the next 4 quarters, ending the current loss-narrowing beat streak.
- P4Short interest stands at 31% of the float — one of the highest levels in the dataset — with a justified-short-interest note in the risk analysis, reflecting broad institutional conviction that the current valuation does not reflect the risks of a cash-burning, concentrated healthcare data company.
Trip ifShort interest rises above 38% of the float, more than 7 percentage points above the current 31%, indicating accelerating institutional bearish positioning.