We came across a bullish thesis on TransMedics Group, Inc. (TMDX) on Substack by Oliver | MMMT Wealth. In this article, we will summarize the bulls’ thesis on TMDX. TransMedics Group, Inc. (TMDX)’s share was trading at $95.81 as of May 7th. TMDX’s trailing and forward P/E were 89.54 and 63.29 respectively according to Yahoo Finance.
A doctor performing a living donor kidney transplant in a hospital operating room, emphasizing the importance of medical advancements.
TransMedics (TMDX), founded by cardiothoracic surgeon Dr. Waleed Hassanein, is revolutionizing the field of organ transplantation with its proprietary warm perfusion technology. Dr. Hassanein identified a critical flaw in the traditional approach of cold organ storage, which keeps organs in a dormant state and significantly limits their viability, repair potential, and transplant suitability. In contrast, TransMedics’ Organ Care System enables organs to remain alive and functioning outside the human body, supplied with oxygen and nutrients in a warm environment. This breakthrough allows for better organ assessment, extended preservation time, and even organ improvement prior to transplant. Competing firms like Sweden’s XVIVO Perfusion and the UK’s OrganOx are the only other significant players in the warm storage space, but the overall competitive landscape remains sparse due to the immense technological, logistical, and regulatory hurdles involved. These barriers have helped TransMedics build a robust competitive moat.
The company’s impact is especially vital considering the underwhelming organ utilization rates in the U.S.: kidneys are discarded 28% of the time, and over 70% of hearts and lungs go unused. Cold storage’s inability to preserve donation after circulatory death and donation after brain death organs compounds this problem. TMDX’s OCS technology directly addresses this issue, enhancing transplant viability for these previously challenging donor types. The company has further integrated this technology with its National OCS Program, an end-to-end service for organ transplant logistics and execution. In 2023, TMDX executed 3,715 OCS cases, with long-term goals of 10,000 annually and eventual targets of 20,000–30,000 as it expands into international markets and kidney transplants. Notably, OCS product sales now represent about 61% of company revenue, with the remainder coming from services tied to transplantation logistics.
TMDX has experienced explosive growth, with revenues growing at 90–200% annually in recent years. Despite this, the stock has pulled back significantly from its all-time highs around $180, now trading near $95—a 47% decline. This reset in valuation has created a highly attractive entry point for investors, especially with the company already achieving profitability in Q4 2023 and gross margins around 60%. However, net margins have yet to scale materially due to early-stage investments, including the expansion of their aviation fleet, which plays a central role in logistics and introduces short-term variability in margins.
TMDX’s Q1 2025 earnings are highly anticipated (scheduled for May 8), and bullish indicators abound. Public flight data—correlated with organ transport cases—suggests the company conducted 2,115 flights in the quarter. Using a conservative $66,000 per-flight revenue estimate implies $139.6 million in revenue, which far exceeds the company’s Q1 guidance of $123.4 million. Even accounting for unknowns like organ mix, internal versus external flight use, and differing revenue per case, estimates of $140–144 million seem plausible. Such results could lead management to raise full-year guidance beyond the already strong $530–552 million (20–25% YoY growth), a move that could trigger a sharp revaluation in the stock. If revenue comes in at the upper end or exceeds $142 million, a 10%+ move post-earnings is possible, further supported by the company’s solid margin outlook and de-risked guidance.
Beyond the near-term numbers, TMDX’s long-term thesis remains intact. Its addressable market may be finite in terms of total organ transplants, but its role in expanding transplant viability increases the effective TAM. Moreover, TMDX’s end-to-end solution, from organ perfusion to logistics, positions it as a critical partner in the healthcare system—not just a device manufacturer. While some investors have raised concerns about aviation fleet costs or were spooked by a short report earlier in 2025, these issues appear transient and are dwarfed by the company’s execution strength and transformative potential. At current levels, the estimated fair value price by 2030 is $368.2, suggesting substantial upside potential as execution continues. With high barriers to entry, limited competition, regulatory know-how, and proven growth, TMDX represents a compelling long-term investment opportunity in one of the most mission-critical and underserved areas of modern medicine.
TransMedics Group, Inc. (TMDX) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 29 hedge fund portfolios held TMDX at the end of the fourth quarter which was 32 in the previous quarter. While we acknowledge the risk and potential of TMDX as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than TMDX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
