iRhythm Technologies (NASDAQ:IRTC) and Tempus AI (NASDAQ:TEM) Critical Analysis

Tempus AI (NASDAQ:TEM) and iRhythm Technologies (NASDAQ:IRTC) are both mid-cap medical companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, analyst recommendations, profitability, earnings and risk.

Risk and Volatility

Tempus AI has a beta of 3.62, meaning that its share price is 262% more volatile than the S&P 500. Comparatively, iRhythm Technologies has a beta of 1.27, meaning that its share price is 27% more volatile than the S&P 500.

Earnings and Valuation

This table compares Tempus AI and iRhythm Technologies”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tempus AI	$1.36 billion	6.53	-$245.03 million	($1.72)	-28.83
iRhythm Technologies	$747.14 million	4.90	-$44.55 million	($0.86)	-129.67

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

Analyst Ratings

This is a breakdown of current ratings for Tempus AI and iRhythm Technologies, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tempus AI	2	4	9	0	2.47
iRhythm Technologies	1	1	12	2	2.94

Tempus AI presently has a consensus price target of $68.64, indicating a potential upside of 38.42%. iRhythm Technologies has a consensus price target of $187.38, indicating a potential upside of 68.04%. Given iRhythm Technologies’ stronger consensus rating and higher possible upside, analysts clearly believe iRhythm Technologies is more favorable than Tempus AI.

Profitability

This table compares Tempus AI and iRhythm Technologies’ 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%
iRhythm Technologies	-3.53%	-10.26%	-1.39%

Insider and Institutional Ownership

24.2% of Tempus AI shares are held by institutional investors. 24.3% of Tempus AI shares are held by company insiders. Comparatively, 1.0% of iRhythm Technologies shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

iRhythm Technologies beats Tempus AI on 9 of the 15 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 iRhythm Technologies

iRhythm Technologies, Inc., a digital healthcare company, engages in the design, development, and commercialization of device-based technology to provide ambulatory cardiac monitoring services to diagnose arrhythmias in the United States. It offers Zio services, an ambulatory monitoring solution, including long-term and short-term continuous monitoring and mobile cardiac telemetry monitoring services. The company also provides the Zio Monitor System, a prescription-only, remote electrocardiogram (ECG) monitoring system that consists of a patch ECG monitor that records the electric signal from the heart continuously for up to 14 days and the Zio ECG Utilization Software System, which supports the capture and analysis of ECG data recorded by the Zio Monitor patch at the end of the wear period, including specific arrhythmia events detected by the ZEUS System; the Zio XT System is the previous generation of the Zio Monitor System and is a prescription-only, remote ECG monitoring system that consists of the Zio XT patch that records the electric signal from the heart continuously for up to 14 days; and the Zio AT system, a prescription-only, remote ECG monitoring system that similarly consists of the Zio AT patch that records the electric signal from the heart continuously for up to 14 days and the ZEUS System, but which also incorporates the Zio AT wireless gateway that provides connectivity between the Zio AT patch and the ZEUS System during the patient wear period. It has a development collaboration agreement with Verily Life Sciences LLC and Verity Ireland Limited to develop various next-generation atrial fibrillation screening, detection, or monitoring products. The company was incorporated in 2006 and is headquartered in San Francisco, California.