Contrasting Tempus AI (NASDAQ:TEM) & Outset Medical (NASDAQ:OM)

Tempus AI (NASDAQ:TEM) and Outset Medical (NASDAQ:OM) are both medical companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, earnings, valuation, profitability, analyst recommendations and risk.

Insider & Institutional Ownership

24.2% of Tempus AI shares are owned by institutional investors. 24.3% of Tempus AI shares are owned by company insiders. Comparatively, 2.5% of Outset Medical shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Tempus AI and Outset Medical’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tempus AI	-22.20%	-53.83%	-11.17%
Outset Medical	-63.65%	-56.13%	-27.45%

Earnings & Valuation

This table compares Tempus AI and Outset Medical”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tempus AI	$1.27 billion	6.76	-$245.03 million	($1.72)	-27.82
Outset Medical	$119.48 million	0.76	-$81.65 million	($4.16)	-1.17

Outset Medical has lower revenue, but higher earnings than Tempus AI. Tempus AI is trading at a lower price-to-earnings ratio than Outset Medical, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and target prices for Tempus AI and Outset Medical, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tempus AI	2	4	9	0	2.47
Outset Medical	1	1	3	0	2.40

Tempus AI presently has a consensus price target of $68.64, suggesting a potential upside of 43.45%. Outset Medical has a consensus price target of $10.00, suggesting a potential upside of 104.92%. Given Outset Medical’s higher possible upside, analysts clearly believe Outset Medical is more favorable than Tempus AI.

Volatility & Risk

Tempus AI has a beta of 3.64, meaning that its stock price is 264% more volatile than the S&P 500. Comparatively, Outset Medical has a beta of 1.95, meaning that its stock price is 95% more volatile than the S&P 500.

Summary

Tempus AI beats Outset Medical on 11 of the 14 factors compared between the two stocks.

About Tempus AI

Tempus AI Inc. is a technology company advancing precision medicine through the practical application of artificial intelligence principally in healthcare. The company provides AI-enabled precision medicine solutions to physicians to deliver personalized patient care and in parallel facilitates discovery, development and delivery of optimal therapeutics. Tempus AI Inc. is based in CHICAGO.

About Outset Medical

Outset Medical, Inc., a medical technology company, engages in the development of a hemodialysis system for hemodialysis in the United States. The company offers Tablo Hemodialysis System, a compact console with integrated water purification, on-demand dialysate production, and software and connectivity capabilities for dialysis care in acute and home settings; and manufactures, supports, and distributes for Tablo console, Tablo cartridge, and other consumables. It also provides Tablo Data Ecosystem, including TabloHub, a customer-facing portal; MyTablo, a patient-facing portal; and TabloDash, an internal data analytics platform. The company was formerly known as Home Dialysis Plus, Ltd. and changed its name to Outset Medical, Inc. in January 2015. Outset Medical, Inc. was incorporated in 2003 and is headquartered in San Jose, California.