Silviano Trino’s new lungs breathed for 11 hours in TransMedics Group’s (TMDX) lung machine before they got transplanted into his body.
The lungs traveled from the Midwest to Texas and were preserved in TransMedics’ OCS Lung System. The technology was officially approved by the US Food and Drug Administration in March 2018.
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Trino was one of the first recipients of lungs transplanted using the device. Two weeks after the surgery, he sang in front of his wife, breaking several years of silence. “I’m now doing things I didn’t realize I could do again,” he said.
TransMedics provides technology for lung, heart, and liver transplants. Its lung and heart machines are the only FDA-approved devices in the US for “both standard and expanded criteria donor lungs” and for “extracorporeal perfusion and preservation of donor hearts.”
In May 2019, TransMedics went public with an initial share price of $16 and raised $104.7 million in its IPO. Its share is now trading at around $150 per share, up 100% since the beginning of 2024, while the S&P 500 added 15%.
TransMedics’ EPS has surpassed consensus estimates for four consecutive quarters.
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Revenue soars, guidance climbs
On July 31, TransMedics reported results for the second quarter of 2024. Earnings per share were 35 cents, topping the analyst estimate of 21 cents. Revenue of $114.31 million was up by a surprising 118%, beating the forecast of $98.97 million.
The medical company’s earnings per share has surpassed consensus estimates for four consecutive quarters.
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TransMedics also raised its full-year 2024 outlook, with revenue guidance of $425 million to $445 million, representing 76% to 84% growth compared to the company’s prior year revenue. Its prior guidance was $390 million to $400 million.
The company recently focused on expanding its logistics services through the National OCS Program (NOP). As of June 30, it owned 15 aircraft and bought two more in July.
“We set a new high-water mark for the business in the second quarter of 2024, with product and service revenue growth driven by the sustained momentum of OCS NOP and our transplant logistics network,” said CEO Waleed Hassanein, who also revealed plans to launch new OCS lung and heart clinical programs in 2025.
Analyst says TransMedics topped “ambitious buy-side expectations”
Analysts from Morgan Stanley, Oppenheimer, Canaccord, and Piper Sandler raised their price targets on TransMedics stock in July.
Morgan Stanley raised the firm’s price target on TransMedics to $145 from $104 and kept an Equal Weight rating.
The analyst said it is “another strong quarter” for TransMedics, exceeding expectations across nearly all core lines and surpassing what were believed to be “ambitious buy-side expectations.” He also added the second-half guidance of 52% growth is “probably conservative, leaving some further upside to numbers.”
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Oppenheimer analyst Suraj Kalia raised the price target to $200 from $125, keeping an Outperform rating on TransMedics shares.
Kalia highlights that the aviation business complements overall organ share gains, new product iterations are promising, and operational expense leverage and organ share gains are progressing faster than anticipated.
Canaccord analyst William Plovanic also raised the target on TransMedics to $169 from $117, keeping shares with a Buy rating, citing the company’s ” most impressive quarters to date with a strong beat.”
Oppenheimer and Canaccord have raised their price targets on TransMedics three times this year.
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