Tempus AI Earnings Ahead: Is TEM Set Up To Pop or Drop?

Tempus AI (NASDAQ:TEM) stock has been highly volatile in recent months, with short interest rising to 14.4%. It remains about 20% below its October high, as investors wait for its upcoming earnings report for cues on revenue growth and profitability.

Tempus AI to Publish its Earnings Report

Tempus AI, the third-biggest company in Cathie Wood’s ARK Innovation ETF (CBOE: ARKK), will be in the spotlight as it publishes its earnings report. 

Its last earnings report showed that Tempus’ revenue continued to grow in the second quarter, driven by its oncology business. Its revenue jumped by 22% to $382.5 million, while its data and applications business made $93.2 million. 

The company also signed large deals with some top companies in the healthcare industry like BioNTech, Daiichi Sankyo, and Level Set Bio. Most notably, it also made a $5.6 million profit after losing $42 million in the same period last year.

Benzinga data shows that analysts expect the company’s revenue to jump by 22.4% in the third quarter to $409 million. Its annual revenue is also expected to jump by 25.4% to $1.6 billion.

These earnings come a few weeks after the company announced a partnership with Bristol Myers Squibb to advance neurological treatments. It also expanded its cancer therapy deal with Moderna (NASDAQ:MRNA) and Merck.

Most notably, the company is in the process of acquiring Personalis (NASDAQ:PSNL) in a $1.5 billion all-stock deal. The deal will help to add cancer test to its AI-enabled precision medicine portfolio.

Most analysts upgraded Tempus AI shares in October. BTIG hiked its target to $80, while Needham and JPMorgan hiked their targets to $75 and $70, respectively. Canaccord Genuity hiked to $95.

Tempus AI Stock Technical Analysis

The daily chart shows that Tempus AI shares peaked at $89.10 in September and then pulled back to $61.59 last month. Its lowest level was important because it coincided with the 200-day Exponential Moving Average (EMA). It was also its highest point in July, a sign that it formed a break-and-retest pattern. The stock has also formed an ascending channel. 

There are two potential scenarios. One is that it resumes its upward trend and retests the important resistance level of $89.10. With the Supertrend indicator being in the red, there is a risk that the stock will drop, possibly to $63.02 after its earnings report. 

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