Tempus AI (NASDAQ:TEM) Sees 3% Surge - Is It a Good Time to Buy?

On Thursday, shares of Tempus AI, Inc. (NASDAQ:TEM) climbed by 3%, reaching a high of $55.60 before settling at $54.86. During the trading day, a total of 3,916,729 shares changed hands, which is 24% lower than the average trading volume of 5,169,968 shares. The stock closed the previous day at $53.25.

Analysts Predict Future Growth

Recent evaluations from various equity research analysts indicate a generally positive outlook for Tempus AI. On February 5th, TD Cowen maintained a "buy" rating on the stock and raised its price target from $58.00 to $74.00. However, JPMorgan Chase & Co. revised their stance on February 25th, downgrading Tempus AI from "overweight" to "neutral" while also increasing their price target from $50.00 to $55.00. Loop Capital also adjusted their price target, reducing it from $57.00 to $52.00 while keeping a "buy" rating. Piper Sandler lowered their estimate from $70.00 to $55.00, maintaining a neutral rating. Wolfe Research changed their rating from "strong-buy" to "hold" on February 26th. The overall consensus shows that six analysts recommend holding the stock while six others rate it as a buy. According to MarketBeat, the average rating is classified as "Moderate Buy" with an average price target of $61.18.

Financial Ratios Indicate Stability

Tempus AI's financial health appears strong, as indicated by a quick ratio of 2.55 and a current ratio of 2.69. However, a high debt-to-equity ratio of 8.17 may raise some concerns about long-term financial stability. The fifty-day moving average is currently $57.78, while the two-hundred-day moving average stands at $51.47.

Insider Trading Activity

Insider activity also reflects some notable transactions. On March 18th, Executive Vice President Andrew Polovin sold 13,135 shares at an average price of $45.98, totaling approximately $603,947. This sale caused his holdings to diminish by 7.85%, leaving him with 154,171 shares valued at around $7,088,782.58. Additionally, Director Jennifer A. Doudna disposed of 1,320 shares on February 14th for a total of $118,800, representing a 3.54% reduction in her stake, which now amounts to 36,011 shares worth approximately $3,240,990. Over the last quarter, insiders have sold a total of 5,598,969 shares for around $317,194,162.

Institutional Investors Increasing Holdings

Institutional investment in Tempus AI is also on the rise. ARK Investment Management LLC has increased its stake by 132.1% in the fourth quarter, now holding 5,519,644 shares valued at $186,343,000 after acquiring an additional 3,141,487 shares. NEA Management Company LLC boosted its shares by 17.8% in the third quarter, accumulating 5,385,979 shares worth $304,846,000 after purchasing 813,169 extra shares. Other firms, including Sumitomo Mitsui Trust Group Inc. and Nikko Asset Management, have also reported significant increases in their holdings during the last quarter. Overall, institutional investors now hold 24.22% of Tempus AI.Tempus, AI, NASDAQ