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Reasons to Retain TransMedics Stock in Your Portfolio for Now
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Key Takeaways
TransMedics' OCS technology drives adoption with FDA-approved heart, lung, and liver platforms.
The National OCS Program boosts logistics growth, with Q2 revenues up 56% year over year.
Strong Q2 results, new clinical trials, and upcoming OCS Kidney launch signal growth momentum.
TransMedics Group, Inc. (TMDX - Free Report) is well-poised for growth in the coming quarters, courtesy of its strength in OCS technology. The optimism, led by solid second-quarter 2025 results, is expected to contribute further. However, concerns due to gross margin pressure persist.
This Zacks Rank #3 (Hold) company has gained 87.2% in the year-to-date period against an 8.4% decline of the industry. The S&P 500 has witnessed 10.1% growth in the said time frame.
The renowned organ transplant therapy provider has a market capitalization of $4 billion. TransMedics’ earnings yield of 1.9% compares favorably with the industry’s (5.2%). The company’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, missing once, with the average surprise being 45.37%.
Image Source: Zacks Investment Research
Factors Favoring TMDX’s Growth
Strength in OCS Technology Driving Adoption: TransMedics’ Organ Care System (OCS) revolutionizes organ transplantation by replacing passive cold storage with a dynamic, physiologic approach that perfuses donor organs with warm, oxygenated, nutrient-rich blood. This innovation minimizes ischemic injury, allows real-time organ assessment, and significantly increases the viability of organs, especially hearts and lungs, donated after circulatory death, that would otherwise go unused.
As the only FDA-approved, portable platform offering warm perfusion for heart, lung, and liver transplants, the OCS standardizes care, reduces post-transplant complications, and sets a new clinical benchmark in organ preservation. This positions TransMedics as a leader in the multi-billion-dollar transplant market with limited competition.
NOP Boosting OCS Growth Further: Complementing its technological edge, TransMedics’ National OCS Program (NOP) offers a fully integrated, end-to-end organ procurement and delivery service, accelerating adoption by streamlining logistics and clinical execution. The NOP manages OCS perfusion, provides procurement surgeons and clinical specialists and operates a proprietary transportation network, including 21 aircraft (22 by the end of 2025), which supported 79% of all air transport missions, up from 78% in the first quarter of 2025.
By centralizing expertise and ensuring timely, controlled delivery, the NOP overcomes cold storage limitations. It extends organ viability, enabling more than 76% of liver transplants and many heart and lung surgeries to occur during daytime hours. With nearly 7,500 transplants performed in the United States and 12% of national heart and liver transplant growth in 2023 attributed to OCS and NOP, TransMedics continues to scale rapidly, reflected in the second quarter transplant logistics revenues of $29.8 million, up 56% year over year and 14% sequentially.
Solid Q2 Results: TransMedics exited second-quarter 2025 with better-than-expected results. The solid top-and-bottom-line performances and the uptick in Transplant Logistics services revenues were encouraging. Strength in both revenue sources was also impressive. The expansion of the operating margin bodes well.
TransMedics’ management emphasized that the company is not only hitting new milestones but actively laying the groundwork for even bigger breakthroughs. A standout development was the FDA’s conditional approval for its next-gen OCS Lung clinical trial, with the OCS Heart IDE expected to follow soon—both viewed as potential growth catalysts for 2026.
Management also highlighted expansion plans, including the upcoming OCS Kidney launch, growing the NOP logistics network, and even identifying a new global headquarters to scale operations beyond 10,000 transplants. These efforts, combined with strong cash generation and operating leverage, position TransMedics to lead a global transformation in transplant care while remaining an attractive growth story for long-term investors.
A Factor That May Offset the Gains for TMDX
Gross Margin Under Pressure: TransMedics posted a 61% gross margin in the second quarter of 2025, steady with recent trends and slightly above last year, but underlying pressures remain. Product margins softened due to higher freight costs tied to inventory replenishment, and upcoming aviation fleet maintenance is expected to add further expense volatility in the back half of the year.
At the same time, a growing reliance on logistics services, while boosting revenue and fleet utilization, continues to dilute profitability since aviation carries much lower margins than products. With logistics growth outpacing higher-margin sales, management signaled that meaningful margin improvement will be difficult to achieve this year, suggesting investors should expect stability rather than expansion despite strong revenue momentum.
Estimate Trend
TransMedics is witnessing a positive estimate revision trend for 2025. In the past 30 days, the Zacks Consensus Estimate for its earnings has moved north by 42 cents to $2.32 per share.
The Zacks Consensus Estimate for the company’s third-quarter 2025 revenues is pegged at $145.2 million, indicating a 33.5% improvement from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space that have announced quarterly results are Medpace Holdings, Inc. (MEDP - Free Report) , West Pharmaceutical Services, Inc. (WST - Free Report) and Boston Scientific Corporation (BSX - Free Report) .
Revenues of $603.3 million surpassed the consensus mark by 11.5%. Medpace Holdings has a long-term estimated growth rate of 11.4%. MEDP’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 13.9%.
West Pharmaceutical reported second-quarter 2025 adjusted EPS of $1.84, beating the Zacks Consensus Estimate by 21.9%. Revenues of $766.5 million surpassed the Zacks Consensus Estimate by 5.4%. It currently flaunts a Zacks Rank #1.
West Pharmaceutical has a long-term estimated growth rate of 8.5%. WST’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 16.8%.
Boston Scientific reported second-quarter 2025 adjusted EPS of 75 cents, beating the Zacks Consensus Estimate by 4.2%. Revenues of $5.06 billion surpassed the Zacks Consensus Estimate by 3.5%. It currently carries a Zacks Rank #2 (Buy).
Boston Scientific has a long-term estimated growth rate of 14%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.1%.
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Reasons to Retain TransMedics Stock in Your Portfolio for Now
Key Takeaways
TransMedics Group, Inc. (TMDX - Free Report) is well-poised for growth in the coming quarters, courtesy of its strength in OCS technology. The optimism, led by solid second-quarter 2025 results, is expected to contribute further. However, concerns due to gross margin pressure persist.
This Zacks Rank #3 (Hold) company has gained 87.2% in the year-to-date period against an 8.4% decline of the industry. The S&P 500 has witnessed 10.1% growth in the said time frame.
The renowned organ transplant therapy provider has a market capitalization of $4 billion. TransMedics’ earnings yield of 1.9% compares favorably with the industry’s (5.2%). The company’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, missing once, with the average surprise being 45.37%.
Image Source: Zacks Investment Research
Factors Favoring TMDX’s Growth
Strength in OCS Technology Driving Adoption: TransMedics’ Organ Care System (OCS) revolutionizes organ transplantation by replacing passive cold storage with a dynamic, physiologic approach that perfuses donor organs with warm, oxygenated, nutrient-rich blood. This innovation minimizes ischemic injury, allows real-time organ assessment, and significantly increases the viability of organs, especially hearts and lungs, donated after circulatory death, that would otherwise go unused.
As the only FDA-approved, portable platform offering warm perfusion for heart, lung, and liver transplants, the OCS standardizes care, reduces post-transplant complications, and sets a new clinical benchmark in organ preservation. This positions TransMedics as a leader in the multi-billion-dollar transplant market with limited competition.
NOP Boosting OCS Growth Further: Complementing its technological edge, TransMedics’ National OCS Program (NOP) offers a fully integrated, end-to-end organ procurement and delivery service, accelerating adoption by streamlining logistics and clinical execution. The NOP manages OCS perfusion, provides procurement surgeons and clinical specialists and operates a proprietary transportation network, including 21 aircraft (22 by the end of 2025), which supported 79% of all air transport missions, up from 78% in the first quarter of 2025.
By centralizing expertise and ensuring timely, controlled delivery, the NOP overcomes cold storage limitations. It extends organ viability, enabling more than 76% of liver transplants and many heart and lung surgeries to occur during daytime hours. With nearly 7,500 transplants performed in the United States and 12% of national heart and liver transplant growth in 2023 attributed to OCS and NOP, TransMedics continues to scale rapidly, reflected in the second quarter transplant logistics revenues of $29.8 million, up 56% year over year and 14% sequentially.
Solid Q2 Results: TransMedics exited second-quarter 2025 with better-than-expected results. The solid top-and-bottom-line performances and the uptick in Transplant Logistics services revenues were encouraging. Strength in both revenue sources was also impressive. The expansion of the operating margin bodes well.
TransMedics’ management emphasized that the company is not only hitting new milestones but actively laying the groundwork for even bigger breakthroughs. A standout development was the FDA’s conditional approval for its next-gen OCS Lung clinical trial, with the OCS Heart IDE expected to follow soon—both viewed as potential growth catalysts for 2026.
Management also highlighted expansion plans, including the upcoming OCS Kidney launch, growing the NOP logistics network, and even identifying a new global headquarters to scale operations beyond 10,000 transplants. These efforts, combined with strong cash generation and operating leverage, position TransMedics to lead a global transformation in transplant care while remaining an attractive growth story for long-term investors.
A Factor That May Offset the Gains for TMDX
Gross Margin Under Pressure: TransMedics posted a 61% gross margin in the second quarter of 2025, steady with recent trends and slightly above last year, but underlying pressures remain. Product margins softened due to higher freight costs tied to inventory replenishment, and upcoming aviation fleet maintenance is expected to add further expense volatility in the back half of the year.
At the same time, a growing reliance on logistics services, while boosting revenue and fleet utilization, continues to dilute profitability since aviation carries much lower margins than products. With logistics growth outpacing higher-margin sales, management signaled that meaningful margin improvement will be difficult to achieve this year, suggesting investors should expect stability rather than expansion despite strong revenue momentum.
Estimate Trend
TransMedics is witnessing a positive estimate revision trend for 2025. In the past 30 days, the Zacks Consensus Estimate for its earnings has moved north by 42 cents to $2.32 per share.
The Zacks Consensus Estimate for the company’s third-quarter 2025 revenues is pegged at $145.2 million, indicating a 33.5% improvement from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space that have announced quarterly results are Medpace Holdings, Inc. (MEDP - Free Report) , West Pharmaceutical Services, Inc. (WST - Free Report) and Boston Scientific Corporation (BSX - Free Report) .
Medpace Holdings, sporting a Zacks Rank of 1 (Strong Buy), reported second-quarter 2025 EPS of $3.10, beating the Zacks Consensus Estimate by 3.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Revenues of $603.3 million surpassed the consensus mark by 11.5%. Medpace Holdings has a long-term estimated growth rate of 11.4%. MEDP’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 13.9%.
West Pharmaceutical reported second-quarter 2025 adjusted EPS of $1.84, beating the Zacks Consensus Estimate by 21.9%. Revenues of $766.5 million surpassed the Zacks Consensus Estimate by 5.4%. It currently flaunts a Zacks Rank #1.
West Pharmaceutical has a long-term estimated growth rate of 8.5%. WST’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 16.8%.
Boston Scientific reported second-quarter 2025 adjusted EPS of 75 cents, beating the Zacks Consensus Estimate by 4.2%. Revenues of $5.06 billion surpassed the Zacks Consensus Estimate by 3.5%. It currently carries a Zacks Rank #2 (Buy).
Boston Scientific has a long-term estimated growth rate of 14%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.1%.