Tempus (TEM) Down 12.9% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for Tempus AI (TEM). Shares have lost about 12.9% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Tempus due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers.

TEM Q4 Earnings Miss, Revenues Beat

Tempus AI reported a fourth-quarter 2025 adjusted loss of 4 cents per share compared with the year-ago quarter’s loss of 16 cents. The metric was wider than the Zacks Consensus Estimate of loss by 66.7%.

GAAP loss per share was 30 cents compared with the year-ago quarter’s GAAP loss of 8 cents.

Full-year 2025 adjusted loss was 61 cents per share compared with the year-ago quarter’s loss of $1.54 per share.

TEM’s Revenues

Fourth-quarter revenues totaled $367.2 million, which beat the Zacks Consensus Estimate by 0.1%. The top line surged 83% on a year-over-year basis.

Full-year 2025 revenues totaled $1.27 billion, up 83.3% on a year-over-year basis.

Following the announcement, shares of Tempus AI declined 3.7% in after-market trading yesterday, reflecting investor reaction to the company’s reported quarterly operating loss.

Q4 Revenues

In the fourth quarter,Diagnostics generated revenues of $266.9 million, representing a 121.6% year-over-year increase.

Within this, Oncology volume grew 29% year over year and Hereditary volume rose 23%.

TheData and Applications segment reported sales of $100.4 million, up 25.1% year over year. This was driven by Insights (data licensing), which grew 69.5% year over year.

Margin Performance

The gross profit in the fourth quarter was $237.7 million, up 94.7% from the year-ago quarter’s level. The adjusted gross margin expanded 391 bps to 64.7% despite a 64.7% rise in the cost of revenues.

Total adjusted operating expenses were $259 million, up 83.8% from the year-ago quarter’s level. The company incurred an operating loss of $21.3 million compared with the year-ago quarter’s loss of $18.8 million.

Liquidity Position

At the end of the fourth quarter of 2025, the company had cash and cash equivalents of $604.8 million compared with $340.9 million at the end of the fourth quarter of 2024.

Cumulative net cash used in investing activities at the end of the reported quarter was $398.3 million compared with $130.4 million a year ago.

Full-Year 2026 Outlook

The company provided its guidance for 2026. Full-year revenues are expected to be $1.59 billion, indicating nearly 25% annual growth. The Zacks Consensus Estimate for revenues is pinned at $1.56 billion.

Adjusted EBITDA for the year is expected to be $65 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

The consensus estimate has shifted -33.2% due to these changes.

VGM Scores

Currently, Tempus has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for value investors.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Tempus has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

Performance of an Industry Player

Tempus belongs to the Zacks Medical Info Systems industry. Another stock from the same industry, Hims & Hers Health, Inc. (HIMS), has gained 31.7% over the past month. More than a month has passed since the company reported results for the quarter ended December 2025.

Hims & Hers Health reported revenues of $617.82 million in the last reported quarter, representing a year-over-year change of +28.4%. EPS of $0.07 for the same period compares with $0.11 a year ago.

For the current quarter, Hims & Hers Health is expected to post earnings of $0.02 per share, indicating a change of -90% from the year-ago quarter. The Zacks Consensus Estimate has changed -88.4% over the last 30 days.

Hims & Hers Health has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.

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This article originally published on Zacks Investment Research (zacks.com).

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