Organ Transplant-Focused TransMedics Clocks Q4 Profit On Increased Use Of Its Organ Care System, Analysts Optimistic About Integrated Aviation Business

Monday, TransMedics Group Inc TMDX reported revenue of $81.2 million in the fourth quarter of 2023, up 159% Y/Y, beating the consensus of $68.51 million.

The increase was due primarily to the increase in utilization of the Organ Care System (OCS) through the National OCS Program (NOP) and additional revenue generated by the addition of TransMedics logistics services.

The company reported EPS Of $0.12, up from a loss of $(0.21) a year ago, beating the consensus loss of $(0.03).

“2023 was a great year for TransMedics as we achieved 159% revenue growth and launched TransMedics transplant logistics services to provide a more operationally and economically efficient service to our transplant program users,” said Waleed Hassanein, MD, President and Chief Executive Officer.

“We are humbled and excited that the use of OCS technology and our NOP program were primary drivers in increasing the national heart and liver transplant volumes by 12% in 2023. This double-digit growth in transplant volumes has not been witnessed in several years.”

Guidance: TransMedics expects fiscal year 2024 revenues of $360 million-$370 million, compared to the consensus of $330.23 million.

Oppenheimer has raised the price target for TransMedics from $92 to $105 with an Outperform.

The company’s strategy focuses on becoming a comprehensive logistics and service provider, offering a one-stop solution. 

Although facing short-term challenges, Oppenheimer writes that the strategy is anticipated to yield significant long-term dividends. The utilization of the Organ Care System for normothermic perfusion is supported by clinical evidence. 

The company aims to enhance its product with OCS 2.0, a specialized cold perfusion solution for Donation after Brain Death (DBD) cases, incorporating Bridge-to-Life assets. Operationalizing a fleet of 15-20 planes efficiently adds further leverage to the overall model.

William Blair expresses a positive outlook on TransMedics, citing strong fourth-quarter results and a promising 2024 outlook. 

Adopting the National Organ Program (NOP) and successfully integrating the aviation business are positive factors, driving increased demand and strengthening TransMedics’ competitive position. 

Due to the solid outlook and growth potential, William Blair maintains an Outperform rating on the stock, considering it a solid long-term growth investment.

Price Action: TMDX shares are up 13.3% at $88.11 on the last check Tuesday.

Photo: Darko Stojanovic from Pixabay