Rothschild Redburn initiates Tempus AI stock coverage at Neutral

Rothschild Redburn has begun covering Tempus AI Inc (NASDAQ:TEM) with a Neutral rating and a price target of $67.00. The firm notes that Tempus AI offers several tests, including the xT-CDx, which is a tumor-informed treatment selection test utilizing tissue samples, and the xR RNA sequencing test. Additionally, Tempus AI provides the xF for tumor-naïve liquid biopsy treatment selection and the xM for tumor-naïve MRD testing.

Tempus AI recently acquired Personalis, gaining its NeXT Personal Dx tumor-informed MRD test. Rothschild Redburn views the business primarily as focusing on treatment selection, but acknowledges the data-driven aspect of the company is unique, though they lack insight into long-term growth. Despite recent challenges, Tempus AI reported a 50% revenue growth over the past year.

Analysts have raised their earnings estimates for the next few years, with a projected 20% CAGR in revenue from 2026 to 2030. The firm expects Tempus AI to reach free cash flow breakeven by 2027, with an adjusted EBITDA margin of 11% initially, rising to 20% by 2030. Tempus AI's financial results for Q2 2026 showed total revenue of $382.5 million, surpassing H.C.

Wainwright's forecast of $390.9 million, but still falling short of the $64 price target that was later lowered to $56. Lastly, several other firms have upgraded Tempus AI's stock rating, including Piper Sandler and Canaccord Genuity, citing acquisition benefits and synergies as key growth factors.