Tempus AI Prices $400 Million Convertible Notes Offering
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy TEM?
Source: Yahoo Finance
- Increased Offering Size: Tempus AI announced the pricing of $400 million in 0.00% Convertible Senior Notes, up from the previously announced $350 million, indicating strong market demand for its financing needs.
- Clear Use of Proceeds: The estimated net proceeds of approximately $384.1 million will be used to repay $307.7 million in outstanding senior secured loans and related fees, enhancing financial stability and supporting future strategic investments.
- Flexible Conversion Terms: The initial conversion rate is set at 14.4388 shares of common stock per $1,000 principal amount, with a conversion premium of about 40%, providing an attractive option for investors while laying the groundwork for potential stock price appreciation.
- Risk Management Measures: Tempus entered into capped call transactions with initial purchasers to mitigate potential dilution of equity, ensuring minimal impact on shareholders during note conversions and bolstering market confidence.
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Analyst Views on TEM
Wall Street analysts forecast TEM stock price to rise
9 Analyst Rating
4 Buy
5 Hold
0 Sell
Moderate Buy
Current: 53.500
Low
76.00
Averages
84.38
High
105.00
Current: 53.500
Low
76.00
Averages
84.38
High
105.00
About TEM
Tempus AI, Inc. is a technology company advancing precision medicine through the practical application of artificial intelligence in healthcare. It offers AI-enabled precision medicine solutions to physicians to deliver personalized patient care and, in parallel, facilitates discovery, development and delivery of optimal therapeutics. It provides three product lines: Genomics, Data and artificial intelligence applications (AI). The Genomics product line leverages its laboratories to provide next generation sequencing (NGS) diagnostics, polymerase chain reaction, profiling, molecular genotyping and other anatomic and molecular pathology testing. The data generated in its lab or ingested into its platform is structured and de-identified, prior to commercialization. Its AI Applications is focused on developing and providing diagnostics that are algorithmic in nature, implementing new software as a medical device, and building and deploying clinical decision support tools.
About the author

Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
- Increased Offering Size: Tempus AI announced the pricing of $400 million in 0.00% convertible senior notes, up from the previously announced $350 million, indicating strong market confidence in its financing needs.
- Clear Use of Proceeds: The estimated net proceeds of approximately $384.1 million will be used to repay $307.7 million in loans and cover other expenses, while also providing funds for future acquisitions and strategic investments, enhancing the company's financial flexibility.
- Flexible Conversion Terms: The initial conversion rate of 14.4388 shares per $1,000 principal amount of notes represents a conversion premium of about 40%, offering an attractive proposition for investors that may drive stock price appreciation.
- Risk Management Measures: Tempus entered into capped call transactions with initial purchasers to mitigate potential dilution of equity, which is expected to positively impact future stock performance and bolster investor confidence.
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- Increased Offering Size: Tempus AI announced the pricing of $400 million in 0.00% Convertible Senior Notes, up from the previously announced $350 million, indicating strong market demand for its financing needs.
- Clear Use of Proceeds: The estimated net proceeds of approximately $384.1 million will be used to repay $307.7 million in outstanding senior secured loans and related fees, enhancing financial stability and supporting future strategic investments.
- Flexible Conversion Terms: The initial conversion rate is set at 14.4388 shares of common stock per $1,000 principal amount, with a conversion premium of about 40%, providing an attractive option for investors while laying the groundwork for potential stock price appreciation.
- Risk Management Measures: Tempus entered into capped call transactions with initial purchasers to mitigate potential dilution of equity, ensuring minimal impact on shareholders during note conversions and bolstering market confidence.
See More
- Significant Revenue Growth: Tempus AI reported Q1 revenue of $348.1 million, reflecting over 36% year-over-year growth, indicating the company's strong market performance and sustained growth potential.
- Strong Diagnostic Business: Diagnostic revenue reached $261.1 million, representing nearly 35% growth, with the oncology segment showing unit growth of about 28%, highlighting the company's competitiveness and rising market demand in critical areas.
- Outstanding Data Business Performance: The data and applications segment generated $87 million in revenue, marking a 40.5% year-over-year increase, with bookings exceeding $100 million for the third consecutive quarter, demonstrating strong customer demand for the company's data solutions.
- Optimistic Full-Year Outlook: The company raised its full-year revenue guidance to a range of $1.59 billion to $1.6 billion, with expected adjusted EBITDA of approximately $65 million, reflecting management's confidence in future growth and market opportunities.
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- Earnings Announcement Schedule: Tempus AI (TEM) is set to release its Q1 2023 earnings on May 5 after market close, with consensus EPS estimated at -$0.20 and revenue expected at $345.44 million, reflecting a 35.1% year-over-year growth, which could significantly impact investor confidence moving forward.
- Historical Performance Review: Over the past year, Tempus AI has beaten EPS and revenue estimates 75% of the time, indicating a stable performance in the market that may attract more investor interest in its future growth potential.
- Estimate Revision Dynamics: In the last three months, EPS estimates have seen one upward revision and six downward adjustments, while revenue estimates experienced four upward revisions and six downward changes, reflecting market uncertainty regarding the company's future performance, prompting investors to closely monitor the upcoming earnings report.
- Market Reaction Expectations: As the earnings report approaches, Tempus AI's stock price may be influenced by market sentiment, particularly given the rising investor interest in its AI model and high growth potential, which could lead to stock price volatility.
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- Price Range Analysis: The ARKK ETF has a 52-week low of $48.53 and a high of $92.65, with the latest trade at $76.22, indicating significant volatility over the past year and reflecting varying market perceptions of its portfolio.
- Technical Analysis Tool: Comparing the latest share price to the 200-day moving average can provide investors with valuable insights for technical analysis, helping to assess whether the current price is overvalued or undervalued, thus influencing investment decisions.
- ETF Unit Trading Mechanism: Exchange-traded funds (ETFs) trade similarly to stocks, where investors are buying and selling “units” that can be created or destroyed based on investor demand, providing flexibility that enhances ETF adaptability during market fluctuations.
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