TMDX: Huge Potential To Buy!
1) $TransMedics Group, Inc.(TMDX)$ stock is up 2x from recent bottom
In this thread I'll explain you why it remains my second biggest position🧵
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2) For those unfamiliar with the company, TransMedics has developed a groundbreaking technology to improve organ transplant procedures by preserving hearts, lungs, and livers in specialized boxes that keep the organs alive outside the body.
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3) The company has also built an integrated service around this innovation, deploying its own logistics fleet and a team of medical experts to offer a comprehensive, end-to-end solution.
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4) This turnaround comes after a sharp deceleration in growth reported in Q3 of last year, which was followed by a short-seller report that further pressured the stock.
5) Despite that turbulence, my conviction in the company has never wavered.
TransMedics has remained focused on its long-term goal: reaching 10,000 transplants per year by 2028.
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6) Why am I not selling this stock?
First, this remains a high-conviction long-term investment for me.
I’m particularly confident in the leadership of its founder and CEO, who has been at the helm of the business for over 25 years and brings both resilience and vision.
7) The second reason is a matter of valuation and risk/reward.
Given the company’s strong track record, and based on the guidance provided by management during quarterly reports and analyst calls, I’ve built a valuation framework looking out to 2033:
8) Procedures: Between 20,000 and 30,000 annually.
Revenue: Approximately $2.5 billion. The first 10,000 procedures (expected by 2028) should generate around $1.2 billion in revenue.
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9) The next 10,000–20,000 would likely contribute slightly more than double that amount, though with some dilution in ASP, as kidney transplants (expected in a few years) will likely carry lower revenue per case.
10) Profit margin: 24%, in line with the company’s 2028 guidance.
Valuation multiple: A 30x PE ratio, which is below or roughly in line with leading medtech peers such as Intuitive Surgical, Edwards Lifesciences, and Boston Scientific.
11) Based on these assumptions, the company could generate $600 million in net income by 2033, implying a potential market capitalization of $18 billion.
That represents a 4x increase over today’s valuation and an annualized return of approximately 17% over nine years.
12) If that sounds overly optimistic, I would argue that these assumptions are not too aggressive.
Every one of the companies mentioned above has delivered similar growth trajectories as they established themselves in emerging markets like robotic surgery, TAVR, and PFA.
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Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
