Tempus AI shares surged nearly 30% this week after Morgan Stanley highlighted a potentially stronger revenue outlook for the AI-powered healthcare company, driven by higher reimbursement rates for its diagnostic tests.
The stock jumped 13.83% on Thursday to $79.65, extending its weekly gain to 29.98%. Real-time market data showed Tempus AI at $80.06, up $10.09, or 14.42%, as of 1:07:27 p.m. EDT.
The rally followed comments from Morgan Stanley on September 15 that focused on the potential revenue impact of updated reimbursement pricing for Tempus' diagnostic products. It highlighted that favourable pricing across the company's xT and xF testing panels could inject an additional $330 million to $400 million into annual top-line revenue.
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Tempus CEO Eric Lefkofsky estimated that pricing for the company's xT test could add $80 million-$100 million in annual revenue next year, while approval and pricing for its xF test could contribute another $250 million-$300 million annually, according to reports.
Together, the potential revenue additions could amount to $330 million-$400 million a year, strengthening the company's growth outlook.
Lefkofsky has also indicated that Tempus could exceed its previously stated 25% multiyear growth target.
Tempus reported $382.49 million in second-quarter FY2026 revenue, up 21.6% from a year earlier. Oncology testing volumes increased 31% during the quarter.
The company subsequently raised its full-year revenue guidance to $1.595 billion-$1.605 billion, implying growth of roughly 25%. It also maintained its adjusted EBITDA guidance at about $65 million.
Tempus' data licensing business has emerged as another key growth driver. Data licensing bookings were around $200 million in the second quarter, with customers including AstraZeneca, GSK, Bristol Myers Squibb, Merck and Daiichi Sankyo.
The latest rally comes after a sharp run in the shares. Tempus has gained 54.24% over the past month, although it remains below its 52-week high of $104.32.
The stock's gains have also outpaced the current Wall Street consensus price target of about $68.18, according to 24/7 Wall St. The report noted that analysts have raised their earnings estimates, with forward FY2027 EPS expectations moving from a loss of $0.1067 90 days ago to $0.0040 currently.
Tempus has a market capitalisation of around $14 billion and trades at roughly nine times sales.
Despite the stronger growth outlook, the company continues to report GAAP losses and carries significant stock-based compensation. It reported $54.1 million in stock-based compensation in the second quarter, highlighting the risks alongside its high-growth profile.
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