Tempus AI: PSNL acquisition: more questions than answers at this point

Research evidence excerpt

Tempus AI: PSNL acquisition: more questions than answers at this point

ibility of competing interest increased the Stock Data

urgency for TEM to act, given the risk of losing a strategically valuable asset (with few

alternatives/back-up options). Price 48.72 USD

Price Objective 64.00 USD

Date Established 6-May-2026Bear case of the deal: Expensive… And details are sparse

While we see strategic rationale of the deal, the acquisition price appears to be at the Investment Opinion C-2-9

high end. TEM is paying $1.5B, or ~15% of its EV, for an asset expected to generate 52-Week Range 41.73 USD - 104.32 USD

~$110M revenue (~6% of TEM’s FY27e revenue, all Street est), which we view is a rich Mrkt Val (mn) / Shares Out 8,503 USD / 174.5

valuation. The deal will be partially financed with at least $734M equity, which will be (mn)

diluted to its existing shareholders. While mgmt. reaffirmed that the acquisition will not Free Float 64.0%

delay its target of achieving positive EBITDA/free cash flow in 2027, we remain cautious Average Daily Value (mn) 309.30 USD

given the limited visibility into the deal model (as discussed below). BofA Ticker / Exchange TEM / NAS

Bloomberg / Reuters TEM US / TEM.OQ

ROE (2026E) -6.6%Lots of unresolved qstns on what to expect from PSNL

There remain several key unresolved questions, particularly around deal economics. Net Dbt to Eqty (Dec-2025A) 96.4%

Mgmt. provided limited incremental details on the revenue target and potential cost

synergies from integrating PSNL’s tests into their existing platform. PSNL’s growth Abbreviations:

outlook is pending on continued volume ramp and additional Mediare reimbursement

wins, the latter of which remains largely outside of mgmt.’s control. Currently ~10% of MRD: minimal residual disease