Mizuho believes Tempus AI is being underestimated. The financial institution initiated the AI-powered well being know-how agency with an outperform ranking and $100 value goal, implying an upside of 78% from Wednesday’s shut. Analyst Bradley Bowers applauded Tempus’ standing as a number one participant in AI-enabled healthcare knowledge companies and precision oncology diagnostics. “We view Core Precision Oncology diagnostics, TEM’s core market, as among the many most tasty in healthcare, with $40bn+ TAM and a sustainable 30%+ development charge,” he wrote. “TEM holds main market share in tissue-informed Complete Genomic Profiling (CGP) with its xT take a look at, and the corporate is well-positioned with its xM to develop in Minimal Residual Illness (MRD) as liquid methodologies speed up traction.” TEM 1Y mountain TEM 1Y chart Bowers added that the corporate’s merchandise and capabilities ought to drive development at or above the market over the following few years. He believes that this issue is discounted at Tempus’ present value, with analysts undervaluing the inventory regardless of its development potential, and argued that Tempus’ sturdy positioning in genomics and knowledge warrants a extra premium a number of “Further concentrate on TEM’s AI attachment has resulted in TEM’s Genomics and Knowledge companies being undervalued regardless of premium development. Evaluation suggests the market is valuing Genomics at ~5.5x EV/gross sales, the place we imagine ~9x+ is extra applicable based mostly on the attractiveness of Genomics testing, TEM taking share, and idiosyncratic ASP tailwinds,” Bowers wrote. “We imagine Knowledge & Companies can also be undervalued, with 30%+ gross sales CAGR achievable by rising capabilities and deepening relationships with pharmaceutical companions (market implies ~4x EV/Gross sales).” The analyst additionally highlighted further catalysts for Tempus by 2028 and past, together with rising take a look at costs and volumes and rising reimbursement wins. Shares of Tempus AI have stumbled 34% over the previous 12 months and are down 5% this 12 months.