Piper Sandler analysts have significantly increased their price target for Tempus AI (NASDAQ:TEM) from $55 to $70 in a research report issued on May 15, 2025, while maintaining a neutral rating on the healthcare technology company's stock.
The revised target reflects growing confidence in Tempus AI's business model following its strong first-quarter performance. The company reported Q1 2025 revenue of $255.7 million, representing a 75.4% increase year-over-year, with quarterly gross profit nearly doubling to $155.2 million compared to the same period last year.
Tempus AI, which specializes in applying artificial intelligence to precision medicine, has been expanding its footprint in the healthcare sector through strategic partnerships and acquisitions. In April, the company announced multi-year collaborations with AstraZeneca and Pathos AI to build what they describe as the largest multimodal foundation model in oncology, a deal expected to generate an additional $200 million in data licensing and model development fees over the next three years.
Following these developments, Tempus AI raised its full-year 2025 revenue guidance to approximately $1.25 billion, representing about 80% growth year-over-year. The company also expects to achieve positive adjusted EBITDA of $5 million for 2025, marking a significant improvement of approximately $110 million over 2024.
Despite the optimistic outlook, Piper Sandler's neutral rating suggests caution regarding Tempus AI's valuation. The company continues to report net losses, with a Q1 2025 net loss of $68 million, though this represents an improvement in its path toward profitability. With a current trading price of $65.49, Piper Sandler's new price target implies a potential upside of 6.89%.
Tempus AI stock has shown significant volatility over the past year, trading between a low of $22.89 and a high of $91.45. The consensus among analysts covering the stock is moderately bullish, with the average price target now standing at approximately $62.75.