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In January 2025, Investing.com’s Fair Value models identified Tempus AI, Inc (NASDAQ:TEM) as significantly undervalued, estimating nearly 40% upside potential. What followed was a remarkable investment opportunity that yielded an 87% return in just 10 months. This success story highlights how Fair Value analysis helps investors find optimal entry points, understand a stock’s intrinsic value, and make more informed investment decisions by combining multiple valuation methodologies. Today’s most promising opportunities can be found on our regularly updated Most undervalued list.
Tempus AI operates in the healthcare sector, leveraging artificial intelligence to improve patient outcomes through precision medicine. When InvestingPro’s models flagged the stock in January, the company had $693 million in trailing revenue but was posting significant losses with an EBITDA of -$654 million and EPS of -$6.23. Despite these losses, our analysis indicated strong growth potential based on the company’s innovative AI healthcare solutions and expanding market presence. The stock had experienced considerable volatility in the six months prior, with monthly returns fluctuating between -46% and +70%.
The Fair Value model identified TEM at $37.52 per share, calculating an intrinsic value of $52.46 – suggesting nearly 40% upside potential. What actually transpired exceeded even these optimistic projections. By November 21, 2025, Tempus AI was trading at $70.28, delivering an 87.3% return in just 10 months. This performance demonstrates the accuracy and effectiveness of InvestingPro’s valuation methodology, which correctly identified the significant gap between market price and intrinsic value.
Recent developments have validated our initial assessment. Tempus has secured FDA clearances for multiple products, including an RNA sequencing device and a cardiac imaging platform. The company’s fundamentals have dramatically improved, with revenue growing to $1.1 billion while substantially reducing its losses (EBITDA improved to -$170.6 million and EPS to -$1.19). The acquisition of Ambry Genetics and strong quarterly results that beat expectations further strengthened its market position.
InvestingPro’s Fair Value analysis succeeds by aggregating multiple valuation approaches, including discounted cash flow models, comparable company analyses, and analyst consensus targets. This comprehensive methodology provides a more reliable intrinsic value estimate than any single valuation technique, helping investors identify mispriced securities before the broader market recognizes the opportunity.
The Tempus AI success story is just one example of how InvestingPro’s tools can identify market inefficiencies and create profitable investment opportunities. With features like Fair Value analysis, financial health scores, and fundamental data insights, InvestingPro subscribers gain access to professional-grade investment research that might otherwise require hours of analysis. Learn more about InvestingPro to discover the next undervalued opportunity before the market catches on.