Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Tempus AI, Inc. (NASDAQ: TEM) is a technology company. The Company provides next generation diagnostics across multiple disease areas, with technological capabilities, harnessing the data and analytics to help personalize medicine. The Company’s product lines include genomics, data, and artificial intelligence applications (AI).

Kalkine’s American Tech Report covers the Company Overview, Key positives & negatives, Investment summary, Key investment metrics, Top 10 shareholding, Business updates and insights into company recent financial results, Key Risks & Outlook, Price performance and technical summary, Target Price, and Recommendation on the stock.

Stock Performance:

• The stock has corrected by 18.84% in the last three months, on the other hand, has given a return of 13.10% in past six months.
• The stock is leaning towards the lower band of its 52-week range of high USD 79.49 and 52-week low price of USD 22.89, with the current price near an important support zone of USD 35.00-USD 38.00, with expectations of upward momentum, if these levels sustains.
• The price is currently between both its short-term (50-day) SMA and long-term (200-day) SMA, with the current RSI of 46.06.

1.2 The Key Positives, Negatives, and Investment summary

1.3 Top 10 shareholders:

The top 10 shareholders together form ~72.05% of the total shareholding, signifying concentrated shareholding. Blue Media, LLC, and BK TL21 LLC, are the biggest shareholders, holding the maximum stake in the company at ~18.12% and ~10.87%, respectively.

1.4 Key Metrics:

Tempus AI, Inc. (TEM) has demonstrated significant financial growth over the past four years, with a compound annual growth rate (CAGR) of 71.07% in revenue, rising from USD 62.1 million in 2019 to USD 531.8 million in 2023. Similarly, the company’s gross profit experienced a robust CAGR of 105.65%, increasing from USD 16 million to USD 286.2 million over the same period. This growth is reflected in the improvement of the gross margin, which expanded from 25.76% in 2019 to 53.82% in 2023, indicating enhanced operational efficiency and profitability.

Section 2: Business Updates and Corporate Business Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

2.2 Insights of Q3FY24:

Section 3: Key Risks & Outlook:

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

Stock Performance:

• The stock has corrected by 18.84% in the last three months, on the other hand, has given a return of 13.10% in past six months.
• The stock is leaning towards the lower band of its 52-week range of high USD 79.49 and 52-week low price of USD 22.89, with the current price near an important support zone of USD 35.00-USD 38.00, with expectations of upward momentum, if these levels sustains.
• The price is currently between both its short-term (50-day) SMA and long-term (200-day) SMA, with the current RSI of 46.06.

4.2 Fundamental Valuation

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is January 07, 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock market can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which stock prices tend to find support if they fall, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

 Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices.