Tempus AI: Short Sellers Ease Back, Analysts Lift Targets Ahead of Q3 Print

TEM reports Q3 results today with short sellers retreating even as the stock dropped 7.2% in a single session on October 30 before recovering 6.8% over the week, a swing that left it sharply outperforming correlated peers: ILMN fell 18.6% on the day and is down 12.4% on the week, while TXG lost 14% in one session.

Short interest at 14.8% of the free float remains elevated but has been unwinding steadily. From a peak near 28.7 million shares short in late September, the position has fallen to roughly 25.5 million, a 10.6% decline over the past month. Borrow conditions do not suggest a squeeze is imminent: the cost to borrow a mere 0.47%, and availability has tightened over the past week to 208% (two shares still available for every one borrowed, down from 270% ten days ago) but remains far from the 52-week low of 12.2%. Options traders are similarly relaxed, with the put/call ratio at 0.43, fractionally below its 20-day average and nowhere near the 52-week defensive peak of 0.664. The message from the lending and derivatives markets is that short sellers are not pressing their bets into this print.

Analysts have been moving in the same direction. Several firms lifted targets in October. JP Morgan raised its target to $70 from $45 while holding a Neutral rating, the largest proportional move in the group. Canaccord lifted to $95 and Guggenheim to $92, both maintaining Buy ratings. Goldman Sachs initiated in September at Neutral with a $75 target. The consensus mean price target now rests at $75, about 4% above Friday's close of $72.22, which keeps TEM priced close to where the Street collectively thinks it should be. The bull case rests on the company's 200-petabyte multimodal dataset, relationships with more than 3,000 healthcare institutions, and over $1.1 billion of remaining contract value, plus a recent expansion with Bristol Myers Squibb and Pathos worth up to $192.5 million. Bears focus on valuation: the stock trades at a negative earnings yield with a price-to-book of 22.5x, and profitability depends on continued reimbursement for genomic tests and uninterrupted expansion of health-system relationships in a competitive field.

CEO Eric Lefkofsky sold roughly $5.7 million of stock on October 27 across multiple tranches. Every transaction was conducted under a pre-arranged 10b5-1 plan, meaning the sales were scheduled in advance and are not a discretionary signal about his near-term outlook. His 13G filing from February showed a 24% stake, down from 25.9% previously, and he remains the dominant shareholder by a wide margin at around 22.5% per the most recent institutional data. Bradley Keywell's most recent 13G/A filed October 28 shows his stake has fallen to 3.46% from 7.6%, dropping below the 5% disclosure threshold. Per SEC rules, holders dropping below 5% may not file again, so his current position is unknown. One index-rebalance factor adds a structural overlay: ORTEX forecasts an 84% chance that TEM's share count increases in the Russell 1000 and Russell 3000 at their estimated December 31 rebalance, driven by the agreed takeover of Personalis, which would require trackers to buy an estimated $95 million of stock around December 30.

The print will test whether the Data and Analytics segment is on track for management's guided 30%-plus growth rate, and whether margin expansion is materialising fast enough to justify a $13 billion market cap on a company still running at a loss.