TenQ

The Tempus AI story

Tempus AI links diagnostic tests with patient records and licenses the resulting research resources, with the central question being whether oncology testing and pharmaceutical partnerships can fund its expansion into cancer monitoring.

Tempus AI stock reportTenQ Score 10/36 · every chart and check from its filings
  • $64.72share price, last close
  • $11.7Bmarket value
  • 10/36TenQ Score checks passed

The story in brief

  • Oncology drives demand. In the quarter to June 2026, Oncology Diagnostics volume grew 31% year over year and molecular residual disease test volume reached 9,000, compared with 6,500 in the preceding quarter.
  • Profit needs context. Net income of $5.6 million in the quarter to June 2026 included $98.5 million in unrealized gains on marketable securities, while Adjusted EBITDA was $8.0 million.
  • Cancer monitoring expands. The agreement to acquire Personalis for $16.25 per share would bring its NeXT Personal molecular residual disease technology into Tempus’ diagnostic platform.

What drives the business

  • Tempus combines laboratory testing with clinical, molecular and imaging records through a provider network covering more than 55% of U.S. oncologists, using that information to personalize diagnostic results and support pharmaceutical research.
  • Its Diagnostics product line includes oncology and hereditary testing, while Data and Applications licenses research resources and provides analytical tools and clinical trial support.
  • In the quarter to June 2026, Diagnostics generated $289.3 million in revenue, up 20% year over year, and Data and Applications generated $93.2 million, up 28%.
  • Insights revenue grew 36% year over year in the quarter to June 2026, when Tempus signed approximately $200 million in new Data and Applications licenses, including deals with BioNTech, Daiichi Sankyo, Level Set Bio and Incyte Pharmaceuticals, and delivered its first oncology foundation model to AstraZeneca.
  • The Personalis acquisition agreement builds on a partnership established in November 2023 through which Tempus invested in Personalis and commercializes its NeXT Personal test, with an announced enterprise value of $1.5 billion net of Tempus’ existing ownership interest.

What the price assumes

The reverse DCF cannot measure an implied growth rate because free cash flow and operating earnings are negative over the last twelve months, leaving the price dependent on future profits rather than an established cash flow base.

Tempus delivered revenue growth of 50.4% over the last twelve months, below its annual growth pace of 58.3% over the last three years.

The shares trade at 9.0x sales against the TenQ sales valuation check’s bar of under 2.5x, while free cash flow yield of -2.0% falls short of its above 3% bar.

What could change the story

  • An operating margin of -19.8% and free cash flow of -$263 million over the last twelve months show that revenue growth has not yet made operations self sustaining.
  • Stock-based pay was $186 million over the last twelve months, and the share count rose 176.5% over three years, making dilution an important part of the growth story.
  • Tempus reported $820.7 million in cash and marketable securities as of June 30, 2026, but its completed $460 million convertible senior note offering adds obligations and potential dilution rather than operating cash generation.
  • Completing Personalis and realizing the benefits of its technology remain execution risks, and the 2026 guidance excludes the transaction’s impact.

What to watch next

  • Tempus raised its 2026 revenue guidance to $1.595 to $1.605 billion, representing approximately 25% annual growth, while maintaining expected Adjusted EBITDA of approximately $65 million.
  • The next releases will show whether molecular residual disease volume continues expanding and whether FDA approval of xT Tumor Only translates into the planned move to ADLT pricing for tissue testing.
  • Recognition of revenue from new pharmaceutical licenses, operating margins and operating cash flow will help distinguish sustained business improvement from gains on marketable securities.
  • The company expects Personalis to close in late in the fourth quarter of 2026 or early 2027, making closing progress and the transaction’s financial impact important disclosures.

Sources

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