TransMedics Group (TMDX) AI Stock Analysis

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TransMedics Group

(NASDAQ:TMDX)

76Outperform

TransMedics Group's overall score reflects strong revenue growth and operational efficiency, offset by high debt levels and cash flow challenges. The stock's bullish technical indicators are promising, but the high valuation presents a risk. Positive earnings call guidance and strategic initiatives further support the stock's outlook.

Positive Factors

Earnings

TMDX reported a very strong operating profit of $27.4M, more than tripling sequentially, achieving an operating margin of 19.1%.

Revenue Guidance

TransMedics raised its 2025 revenue guidance by $34M, projecting top-line growth of roughly 30% at the midpoint.

Negative Factors

Lung Transplants

Total lung transplants declined by 1% month-over-month, with DCD lung transplants declining 17%, indicating weaker performance for TMDX.

Market Share

TMDX has only about 4% of the lung transplant market share, suggesting limited influence in this area.

TransMedics Group (TMDX) vs. S&P 500 (SPY)

Market Cap

$4.11B

Dividend YieldN/A

Average Volume (3M)1.34M

Price to Earnings (P/E)89.4

Beta (1Y)1.44

Revenue Growth64.43%

EPS GrowthN/A

CountryUS

Employees728

SectorHealthcare

Sector Strength41

IndustryMedical - Devices

Share Statistics

EPS (TTM)0.70

Shares Outstanding33,833,790

10 Day Avg. Volume1,646,673

30 Day Avg. Volume1,341,317

Financial Highlights & Ratios

PEG Ratio8.04

Price to Book (P/B)10.08

Price to Sales (P/S)0.00

P/FCF Ratio-28.52

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$114.67

Price Target Upside-5.68% Downside

Rating ConsensusModerate Buy

Number of Analyst Covering8

TransMedics Group Business Overview & Revenue Model

Company DescriptionTransMedics Group, Inc. is a medical technology company that specializes in organ transplant solutions. The company is known for developing the Organ Care System (OCS), a proprietary technology platform designed to optimize the preservation, assessment, and transport of donor organs intended for transplantation. TransMedics' innovative products aim to improve organ utilization and transplant outcomes across multiple organ types, including heart, lung, and liver, thus addressing critical challenges in the organ transplantation industry.

How the Company Makes MoneyTransMedics Group generates revenue primarily through the sale and leasing of its Organ Care System (OCS) products and related consumables. The OCS platform offers a range of specialized modules for different organs, and the company charges healthcare institutions and transplant centers for the use of these systems and the disposable products required for each transplantation procedure. Revenue is also derived from service agreements and maintenance contracts associated with the OCS systems. Additionally, TransMedics may engage in partnerships or collaborations with healthcare organizations and research institutions to further expand its commercial reach and enhance its technological offerings. The company's innovative approach and focus on improving transplant outcomes contribute significantly to its revenue streams.

TransMedics Group Key Performance Indicators (KPIs)

Any

Revenue by Organ

Revenue by Organ
Details revenue generated from different organ transplant solutions, indicating which areas are most lucrative and where there might be potential for expansion or increased market share.

Chart InsightsTransMedics' revenue growth is driven by significant gains in the liver segment, which has seen a remarkable increase in market share from 17% to 27% in 2024. This aligns with the company's overall strong performance, achieving its first year of positive cash flow and a substantial increase in U.S. revenue. However, challenges remain with gross margin pressures and flat international revenue. The company's focus on expanding logistics and investing in next-gen technology is crucial for sustaining growth and addressing operational hurdles.

Data provided by:

Main Street Data

TransMedics Group Financial Statement Overview

Summary

TransMedics Group has shown strong revenue growth and profitability, with improved gross profit and net profit margins. However, increased debt levels present a leverage risk that needs careful management.

Income Statement

Very Positive

TransMedics Group has shown a remarkable improvement in revenue, with a positive trajectory from $23.6M in 2019 to $441.5M in 2024. The Gross Profit Margin has improved significantly, indicating increased efficiency in cost management. The Net Profit Margin turned positive in 2024, showing profitability after years of losses. EBIT and EBITDA margins have also turned positive, reflecting operational improvements.

Balance Sheet

Positive

The company's Debt-to-Equity ratio has increased due to higher debt levels, indicating potential leverage risks. However, the Return on Equity (ROE) has improved due to increased profitability, and the Equity Ratio remains stable, suggesting a balanced capital structure with a significant equity base.

Cash Flow

Positive

TransMedics Group has improved its Free Cash Flow, turning positive in 2024. The Operating Cash Flow to Net Income ratio indicates strong cash generation relative to net income. The Free Cash Flow to Net Income ratio also shows that the company is generating cash flow that supports its profitability, though historical negative free cash flows highlight past challenges.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
441.54M	241.62M	93.46M	30.26M	25.64M
	Gross Profit
262.08M	154.09M	65.27M	21.16M	16.64M
	EBIT
37.50M	-28.73M	-31.44M	-39.43M	-26.38M
	EBITDA
69.95M	-7.60M	-28.96M	-38.49M	-23.15M
	Net Income Common Stockholders
35.46M	-25.03M	-36.23M	-44.22M	-28.75M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
336.65M	394.81M	201.18M	92.45M	125.64M
	Total Assets
804.08M	706.05M	277.15M	134.89M	152.03M
	Total Debt
458.92M	515.95M	67.56M	8.60M	34.66M
	Net Debt
122.27M	121.13M	-133.63M	-16.98M	10.08M
	Total Liabilities
575.47M	568.85M	89.77M	67.04M	48.13M
	Stockholders Equity
228.60M	137.20M	187.38M	67.85M	103.89M
Cash Flow		Free Cash Flow
48.80M	-192.09M	-57.72M	-32.38M	-30.72M
	Operating Cash Flow
48.80M	-13.03M	-45.82M	-28.86M	-30.27M
	Investing Cash Flow
-129.30M	-193.95M	54.51M	29.27M	-41.60M
	Financing Cash Flow
22.87M	400.42M	167.93M	1.39M	75.55M

TransMedics Group Technical Analysis

Technical Analysis Sentiment

Positive

Last Price121.58

Price Trends

50DMA

83.37

Positive

100DMA

75.64

Positive

200DMA

99.36

Positive

Market Momentum

MACD

10.85

Negative

RSI

81.55

Negative

STOCH

91.84

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TMDX, the sentiment is Positive. The current price of 121.58 is above the 20-day moving average (MA) of 100.33, above the 50-day MA of 83.37, and above the 200-day MA of 99.36, indicating a bullish trend. The MACD of 10.85 indicates Negative momentum. The RSI at 81.55 is Negative, neither overbought nor oversold. The STOCH value of 91.84 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TMDX.

TransMedics Group Risk Analysis

TransMedics Group disclosed 71 risk factors in its most recent earnings report. TransMedics Group reported the most risks in the “Production” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

TransMedics Group Peers Comparison

Overall Rating

UnderperformOutperform

Sector (52)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
UFPT	80 Outperform	$1.95B	31.03	19.36%	―	34.43%	31.90%
TMDX	76 Outperform	$4.11B	89.36	22.99%	―	64.43%	―
AORT	68 Neutral	$1.26B	―	-7.25%	―	5.94%	-115.82%
LIVN	63 Neutral	$2.42B	30.62	-19.69%	―	7.97%	-592.40%
Sector *	52 Neutral	$5.15B	3.02	-44.64%	2.83%	16.44%	-0.47%
IART	52 Neutral	$1.05B	―	-1.85%	―	6.19%	-174.69%
PRCT	51 Neutral	$3.21B	―	-27.62%	―	59.36%	19.87%

* Healthcare Sector Average

Performance Comparison

TMDX

TransMedics Group

121.58

-17.04

-12.29%

AORT

Artivion

29.51

5.70

23.94%

IART

Integra Lifesciences

13.57

-13.41

-49.70%

UFPT

Ufp Technologies

253.30

-4.78

-1.85%

LIVN

LivaNova

44.40

-16.88

-27.55%

PRCT

PROCEPT BioRobotics

58.07

-10.63

-15.47%

TransMedics Group Earnings Call Summary

Earnings Call Date:May 08, 2025

(Q1-2025)

% Change Since: 30.45%|

Next Earnings Date:Jul 31, 2025

Earnings Call Sentiment Positive

The earnings call highlighted strong revenue growth and operational efficiency improvements, particularly in the U.S. market and logistics services. However, challenges remain in international revenue growth, service gross margin, and managing increased operating expenses. Despite these lowlights, the overall outlook is positive with raised revenue guidance and significant strategic advancements.

Q1-2025 Updates

Positive Updates

Record Revenue Growth

Total revenue for Q1 2025 was $143.5 million, representing approximately 48% growth year-over-year and 18% sequential growth from Q4 2024.

Strong Performance in Transplant Services

TransMedics transplant services revenue for Q1 was approximately $55.3 million, up 56% year-over-year and 18.5% sequentially.

Improved Gross Margin

Overall gross margins for Q1 improved to 61.5%, up from 59% in Q4 2024.

Significant Operating Profit Increase

Operating profit was $27.4 million in Q1, representing approximately 19% of total revenue and up significantly from 7% of total revenue in Q4 2024.

Successful Expansion in Logistics

Transplant Logistics services revenue for Q1 was $26.1 million, representing approximately 80% year-over-year and 20% sequential growth.

Raised Full-Year Revenue Guidance

Full-year 2025 revenue guidance was raised to between $565 million and $585 million, representing approximately 28% to 32% growth over full-year 2024.

Negative Updates

Flat International Revenue

OUS revenue was $4 million, down 1% from Q1 2024 and up only 4% sequentially, indicating challenges in international growth.

Service Gross Margin Challenges

Service gross margin declined 632 basis points versus Q1 2024, primarily driven by the higher proportion of the aviation business.

Higher Operating Expenses

Total operating expenses for Q1 2025 were approximately $61 million, up 28% year-over-year, driven by a 51% increase in R&D and a 21% increase in SG&A.

Cash Flow Concerns

The company ended the quarter with $310 million in cash, down $26.5 million from December 31, 2024, due to investments in additional aircraft.

Company Guidance

During TransMedics' first-quarter 2025 earnings call, the company provided updated financial guidance reflecting a robust performance. Total revenue for Q1 2025 reached $143.5 million, marking approximately 48% year-over-year growth and 18% sequential growth, driven by increased adoption of the OCS NOP platform for liver and heart transplants. The company's transplant services revenue rose to $55.3 million, up 56% from the previous year. Operating profit for Q1 was reported at $27.4 million, constituting 19% of total revenue, compared to 7% in Q4 2024. The gross margin improved to 61.5%. For fiscal year 2025, TransMedics raised its full-year revenue guidance to $565-$585 million, representing 28%-32% growth over 2024. The company plans to launch new heart and lung clinical programs in the second half of 2025, with expected contributions primarily in 2026. Despite external distractions, TransMedics maintained strong operational execution, underscoring resilience and support from the transplant clinical community.

TransMedics Group Corporate Events

Executive/Board ChangesBusiness Operations and StrategyFinancial Disclosures

TransMedics Group Appoints New CFO Amid Growth Forecast

Positive

Dec 2, 2024

TransMedics Group, Inc. has appointed Gerardo Hernandez as the new Chief Financial Officer, effective December 2, 2024, succeeding Stephen Gordon. Hernandez brings over 25 years of financial experience across healthcare and consumer sectors, having previously held significant roles at Alnylam Pharmaceuticals and Shire. The company also updated its 2024 financial outlook, projecting substantial revenue growth. This strategic leadership change aims to enhance TransMedics’ operations and expand its market influence in organ transplantation technologies.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.