TMDX - TransMedics: Transportation Supporting Growth

2024-05-21 08:00:02 ET

Summary

• TransMedics' logistics business is performing well, supporting growth as the device business begins to mature.
• TMDX is planning clinical trials to increase the use of its devices in heart and lung transplants, which will be necessary to maintain growth going forward.
• The Company's valuation is high and there is probably limited room for further multiple expansion. The stock should be supported by continued momentum in the business, though.
• Caution is warranted as TransMedics' end market is limited, and revenue growth will likely decelerate considerably over the next few years.

TransMedics ( TMDX ) continues to go from strength to strength, with its logistics business performing particularly well in recent quarters. While its core liver market in the US should continue to drive reasonable growth, TransMedics is planning on a number of clinical trials which could increase the penetration of its devices in heart and lung transplants. Given the company's high valuation, new indications and geographic expansion are probably necessary for investors to see reasonable returns....

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