Tempus AI, Inc. (NASDAQ: TEM)

Sector: Healthcare Industry: Health Information Services CIK: 0001717115
Market Cap 45.63 Bn
P/B 89.86
P/E -223.83
P/S 41.29
ROIC (Qtr) -16.17
Div Yield % 0.00
Rev 1y % (Qtr) 84.72
Total Debt (Qtr) 1.34 Bn
Debt/Equity (Qtr) 2.63

About

Price action

Investment thesis

Bull case

  • Healthy cash reserves of 660.55M provide 53.20x coverage of short-term debt 12.42M, demonstrating strong liquidity position and minimal refinancing risk.
  • Tangible assets of 1.44B provide exceptional 10.45x coverage of deferred revenue 138.12M, showing strong service capability backing.
  • Operating cash flow of (220.55M) fully covers other non-current liabilities (37.95M) by 5.81x, showing strong long-term stability.
  • Cash reserves of 660.55M provide robust 1.89x coverage of current liabilities 350.03M, indicating strong short-term solvency.
  • R&D investment of 289.89M represents healthy 2.10x of deferred revenue 138.12M, indicating strong future innovation pipeline.

Bear case

  • Operating cash flow of (220.55M) barely covers its investment activities of (395.60M), with a coverage ratio of 0.56, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (395.60M) provide weak support for R&D spending of 289.89M, which is -1.36x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 660.55M provide limited coverage of acquisition spending of (375.02M), which is -1.76x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of (220.55M) provides insufficient coverage of deferred revenue obligations of 138.12M, which is -1.60x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of (220.55M) shows concerning coverage of stock compensation expenses of 104.19M, with a -2.12 ratio indicating potential earnings quality issues.

Peer comparison

Companies in the Health Information Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 TEM Tempus AI, Inc. 45.63 Bn -223.83 41.29 1.34 Bn
2 GEHC GE HealthCare Technologies Inc. 38.75 Bn 19.85 2.19 10.28 Bn
3 VEEV Veeva Systems Inc 37.30 Bn 43.36 12.11 0.09 Bn
4 DOCS Doximity, Inc. 7.81 Bn 30.87 12.57 0.01 Bn
5 BTSG BrightSpring Health Services, Inc. 7.70 Bn 59.42 0.62 2.70 Bn
6 HQY Healthequity, Inc. 7.32 Bn 38.14 5.67 1.03 Bn
7 WAY Waystar Holding Corp. 5.00 Bn 44.97 4.81 1.25 Bn
8 PRVA Privia Health Group, Inc. 2.79 Bn 153.67 1.37 0.01 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 20.29 2.77
EV to Cash from Ops. EV/CFO -209.92 -10.86
EV to Debt EV to Debt 34.66 161.93
EV to EBIT EV/EBIT -255.65 -106.48
EV to EBITDA EV/EBITDA -312.74 4.22
EV to Free Cash Flow [EV/FCF] EV/FCF -185.61 7.46
EV to Market Cap EV to Market Cap 1.01 -14.93
EV to Revenue EV/Rev 41.89 1.76
Price to Book Value [P/B] P/B 89.86 10.57
Price to Earnings [P/E] P/E -223.83 147.14
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 -8.65
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 5.00
Dividend per Basic Share Div per Share (Qtr) 0.00 0.04
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 4.57
Interest Coverage Int. cover (Qtr) -2.65 -584.72
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -71.28 -24.09
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 69.86 172.48
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -1.05
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 78.53 -17.73
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 77.22 39.85
EBIT Growth (1y) % EBIT 1y % (Qtr) 73.71 -38.83
EBT Growth (1y) % EBT 1y % (Qtr) 66.42 -4.52
EPS Growth (1y) % EPS 1y % (Qtr) 96.95 2.60
FCF Growth (1y) % FCF 1y % (Qtr) -20.55 -48.57
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 100.31 5.49
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.48 0.66
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.03
Cash Ratio Cash Ratio (Qtr) 1.89 1.87
Current Ratio Curr Ratio (Qtr) 3.28 3.27
Debt to Equity Ratio Debt/Equity (Qtr) 2.63 -0.43
Interest Cover Ratio Int Coverage (Qtr) -2.65 -584.72
Times Interest Earned Times Interest Earned (Qtr) -2.65 -584.72
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -7.90 -435.80
EBIT Margin % EBIT Margin % (Qtr) -16.39 -464.70
EBT Margin % EBT Margin % (Qtr) -22.57 -461.74
Gross Margin % Gross Margin % (Qtr) 61.70 44.03
Net Profit Margin % Net Margin % (Qtr) -18.40 -468.01