Mizuho believes Tempus AI is being underestimated. The bank initiated the AI-powered health technology firm with an outperform rating and $100 price target, implying an upside of 78% from Wednesday's close. Analyst Bradley Bowers applauded Tempus' status as a leading player in AI-enabled healthcare data services and precision oncology diagnostics. "We view Core Precision Oncology diagnostics, TEM's core market, as among the most attractive in healthcare, with $40bn+ TAM and a sustainable 30%+ growth rate," he wrote. "TEM holds leading market share in tissue-informed Comprehensive Genomic Profiling (CGP) with its xT test, and the company is well-positioned with its xM to grow in Minimal Residual Disease (MRD) as liquid methodologies accelerate traction." TEM 1Y mountain TEM 1Y chart Bowers added that the company's products and capabilities should drive growth at or above the market over the next few years. He believes that this factor is discounted at Tempus' current price, with analysts undervaluing the stock despite its growth potential, and argued that Tempus' strong positioning in genomics and data warrants a more premium multiple "Additional focus on TEM's AI attachment has resulted in TEM's Genomics and Data businesses being undervalued despite premium growth. Analysis suggests the market is valuing Genomics at ~5.5x EV/sales, where we believe ~9x+ is more appropriate based on the attractiveness of Genomics testing, TEM taking share, and idiosyncratic ASP tailwinds," Bowers wrote. "We believe Data & Services is also undervalued, with 30%+ sales CAGR achievable by increasing capabilities and deepening relationships with pharmaceutical partners (market implies ~4x EV/Sales)." The analyst also highlighted additional catalysts for Tempus through 2028 and beyond, including rising test prices and volumes and increasing reimbursement wins. Shares of Tempus AI have stumbled 34% over the past 12 months and are down 5% this year.
