Tempus AI Stock Target Trimmed as Growth Rate to Slow

Tempus AI's stock (NASDAQ:TEM) has come under some pressure in recent sessions, and this morning faces up to H.C. Wainwright's lowered price target on the stock, reflecting concerns about a potential slowdown in future revenue growth.

The stock traded lower this week, down 17.89%, and has continued the trend with a 1.93% dip in pre-market. Despite this recent dip, Tempus AI's stock price remains significantly higher year-to-date, up 110%, illustrating the strong gains made earlier in the year. The adjustment from H.C. Wainwright reflects a revised expectation for sales growth in 2026, anticipated to be above 20% but notably less than the growth rate projected for 2025.

While the company continues to demonstrate robust performance and strategic expansion, investor sentiment appears tempered by anticipated deceleration in growth rates and ongoing net losses.

Q3 Earnings and Market Reaction

Tempus AI's Q3 2025 earnings report revealed a revenue of $334.2 million, surpassing analyst estimates of $328.7 million and marking an impressive 84.7% increase year-over-year. However, the company reported a net loss of $80 million for the quarter, slightly larger than the $75.8 million loss in Q3 2024. Earnings per share (EPS) came in at -$0.46, missing consensus estimates by $0.15. A positive note was the achievement of a positive adjusted EBITDA of $1.5 million, suggesting improvements in operational efficiency.

Following the earnings release, Tempus AI's stock experienced a decline of approximately 4.76% in after-hours trading, closing at $85. This decline occurred despite the company exceeding revenue estimates, indicating that markets are focused on future guidance and market conditions.

A key strategic move for Tempus AI was the acquisition of Paige.AI, a company specializing in digital pathology. This acquisition is expected to enhance Tempus's dataset and technical capabilities, positioning the company to offer more advanced AI-driven solutions in precision medicine.

However, the acquisition is projected to increase quarterly losses by approximately $5 million, impacting the company's adjusted EBITDA in the near term.

Future Outlook and Analyst Revision

Price Targets

Despite these challenges, Tempus AI has raised its full-year 2025 revenue guidance to $1.265 billion, reflecting approximately 80% year-over-year growth. This optimistic outlook signals confidence in the company's ongoing expansion, even with the anticipated deceleration in growth rates in subsequent years.

H.C. Wainwright's decision to lower the price target to $89 from $98, while maintaining a “Buy” rating, reflects a nuanced perspective on Tempus AI's prospects. The firm acknowledges the company's potential but also recognizes the challenges associated with sustaining its rapid growth trajectory.

The combination of strong revenue growth, strategic acquisitions, and revised growth expectations has created a complex narrative for Tempus AI. While the company's advancements in AI-driven precision medicine remain promising, markets will likely continue to scrutinize its ability to achieve profitability and maintain a healthy growth rate in the coming years. The stock's reaction to the Q3 earnings and revised outlook suggests that near-term sentiment may be influenced by concerns over future profitability, but sentiment can shift on a dime.