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Reasons to Retain TransMedics Stock in Your Portfolio for Now
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Key Takeaways
TMDX is set for growth supported by OCS strength, a solid pipeline and strong Q3 results.
OCS advances, new trials and expansion plans highlight drivers of TMDX's adoption.
Margin pressure persists as seasonal trends and investments keep gross margin near 60%.
TransMedics Group, Inc. (TMDX - Free Report) is well-poised for growth in the coming quarters, courtesy of its strength in Organ Care System (“OCS”) technology. The optimism, led by solid third-quarter 2025 results, is expected to contribute further. However, concerns due to gross margin pressure persist.
This Zacks Rank #3 (Hold) company has gained 116.2% in the year-to-date period compared with 3.1% growth of the industry. The S&P 500 has witnessed 18.7% growth in the said time frame.
The renowned organ transplant therapy provider has a market capitalization of $4.67 billion. TransMedics’ earnings yield of 1.9% compares favorably with the industry’s (4.4%). The company’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 79.25%.
Image Source: Zacks Investment Research
Factors Favoring TMDX’s Growth
Strength in OCS Technology Driving Adoption: TransMedics’ 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.
Robust Pipeline Supporting Growth: TransMedics’ third-quarter update underscored meaningful momentum across its clinical pipeline, with next-generation ENHANCE Heart and DENOVO Lung trials set to begin enrolling and generating initial revenues in fourth-quarter 2025 under conditional IDE approvals. Management expects full FDA clearance by early 2026, positioning these studies to accelerate OCS Heart and Lung adoption as they demonstrate the improved performance of the Gen 2 platform.
Alongside these programs, the company advanced its OCS Kidney initiative, with strong preclinical and product development progress and a formal system reveal slated for early 2026. The upcoming kidney trial is expected to be large in scale and revenue-generating, supporting TransMedics’ entry into the biggest organ transplant category beginning in 2027.
The company also highlighted progress on its Gen 3 OCS platform and continued rollout of the NOP Connect digital ecosystem. Gen 3 development is well underway, with additional technical details expected in the second half of 2026. Meanwhile, early feedback on NOP Connect points to efficiency gains that should become more visible as centers deepen integration through 2026. Together, these pipeline and platform initiatives reinforce TransMedics’ long-term innovation strategy aimed at scaling adoption, expanding its addressable market and strengthening operational leverage.
Solid Q3 Results: TransMedics exited third-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.
The company is preparing large-scale geographic and operational expansion, first by launching its inaugural international NOP program in Italy during the first half of 2026, supported by up to four regional hubs and eventually building a European logistics network similar to the U.S. model. TMDX has raised its aviation capacity to 22 aircraft and plans to pilot “double-shifting” the fleet to improve asset utilization and margins. Management is also finalizing a new global headquarters and manufacturing campus in Somerville to consolidate operations and support future scaling.
Factor That Can Offset the Gains for TMDX
Gross Margin Under Pressure: TransMedics’ third-quarter 2025 gross margin of approximately 59% reflected a sequential decline of about 260 bps, caused by seasonal transplant slowdowns, lower utilization and continued infrastructure investments that pressured cost absorption despite solid year-over-year improvement. Logistics remained a key revenue driver but continued to dilute blended margins, with activity also easing sequentially in line with seasonal patterns.
Management expects margins to remain near 60% over the next few years, though near-term volatility is likely as international expansion and upfront investments continue. While these pressures should moderate with scale, the company does not anticipate meaningful margin expansion in the immediate term, keeping the trajectory stable but capped even amid strong revenue growth and operating leverage.
Estimate Trend
TransMedics is witnessing a stable estimate revision trend for 2025. In the past 30 days, the Zacks Consensus Estimate for its earnings has remained stable at $2.61 per share.
The Zacks Consensus Estimate for the company’s fourth-quarter 2025 revenues is pegged at $156.2 million, indicating a 28.4% improvement from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space are Intuitive Surgical (ISRG - Free Report) , Medpace Holdings (MEDP - Free Report) and Boston Scientific (BSX - Free Report) .
Intuitive Surgical, sporting a Zacks Rank #1 (Strong Buy) at present, posted third-quarter 2025 adjusted earnings per share (EPS) of $2.40, exceeding the Zacks Consensus Estimate by 20.6%. Revenues of $2.51 billion topped the Zacks Consensus Estimate by 3.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.
ISRG has an estimated long-term earnings growth rate of 15.7% compared with the industry’s 11.9% growth. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 16.34%.
Medpace, currently carrying a Zacks Rank #2 (Buy), reported third-quarter 2025 EPS of $3.86, which surpassed the Zacks Consensus Estimate by 10.29%. Revenues of $659.9 million beat the Zacks Consensus Estimate by 3.04%.
MEDP has an estimated earnings growth rate of 17.1% for 2025 compared with the industry’s 16.6% growth. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 14.28%.
Boston Scientific, currently carrying a Zacks Rank #2, reported third-quarter 2025 adjusted EPS of 75 cents, which surpassed the Zacks Consensus Estimate by 5.6%. Revenues of $5.07 billion outperformed the Zacks Consensus Estimate by 1.9%.
BSX has an estimated long-term earnings growth rate of 16.4% compared with the industry’s 13.5% growth. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 7.36%.
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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 Organ Care System (“OCS”) technology. The optimism, led by solid third-quarter 2025 results, is expected to contribute further. However, concerns due to gross margin pressure persist.
This Zacks Rank #3 (Hold) company has gained 116.2% in the year-to-date period compared with 3.1% growth of the industry. The S&P 500 has witnessed 18.7% growth in the said time frame.
The renowned organ transplant therapy provider has a market capitalization of $4.67 billion. TransMedics’ earnings yield of 1.9% compares favorably with the industry’s (4.4%). The company’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 79.25%.
Image Source: Zacks Investment Research
Factors Favoring TMDX’s Growth
Strength in OCS Technology Driving Adoption: TransMedics’ 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.
Robust Pipeline Supporting Growth: TransMedics’ third-quarter update underscored meaningful momentum across its clinical pipeline, with next-generation ENHANCE Heart and DENOVO Lung trials set to begin enrolling and generating initial revenues in fourth-quarter 2025 under conditional IDE approvals. Management expects full FDA clearance by early 2026, positioning these studies to accelerate OCS Heart and Lung adoption as they demonstrate the improved performance of the Gen 2 platform.
Alongside these programs, the company advanced its OCS Kidney initiative, with strong preclinical and product development progress and a formal system reveal slated for early 2026. The upcoming kidney trial is expected to be large in scale and revenue-generating, supporting TransMedics’ entry into the biggest organ transplant category beginning in 2027.
The company also highlighted progress on its Gen 3 OCS platform and continued rollout of the NOP Connect digital ecosystem. Gen 3 development is well underway, with additional technical details expected in the second half of 2026. Meanwhile, early feedback on NOP Connect points to efficiency gains that should become more visible as centers deepen integration through 2026. Together, these pipeline and platform initiatives reinforce TransMedics’ long-term innovation strategy aimed at scaling adoption, expanding its addressable market and strengthening operational leverage.
Solid Q3 Results: TransMedics exited third-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.
The company is preparing large-scale geographic and operational expansion, first by launching its inaugural international NOP program in Italy during the first half of 2026, supported by up to four regional hubs and eventually building a European logistics network similar to the U.S. model. TMDX has raised its aviation capacity to 22 aircraft and plans to pilot “double-shifting” the fleet to improve asset utilization and margins. Management is also finalizing a new global headquarters and manufacturing campus in Somerville to consolidate operations and support future scaling.
Factor That Can Offset the Gains for TMDX
Gross Margin Under Pressure: TransMedics’ third-quarter 2025 gross margin of approximately 59% reflected a sequential decline of about 260 bps, caused by seasonal transplant slowdowns, lower utilization and continued infrastructure investments that pressured cost absorption despite solid year-over-year improvement. Logistics remained a key revenue driver but continued to dilute blended margins, with activity also easing sequentially in line with seasonal patterns.
Management expects margins to remain near 60% over the next few years, though near-term volatility is likely as international expansion and upfront investments continue. While these pressures should moderate with scale, the company does not anticipate meaningful margin expansion in the immediate term, keeping the trajectory stable but capped even amid strong revenue growth and operating leverage.
Estimate Trend
TransMedics is witnessing a stable estimate revision trend for 2025. In the past 30 days, the Zacks Consensus Estimate for its earnings has remained stable at $2.61 per share.
The Zacks Consensus Estimate for the company’s fourth-quarter 2025 revenues is pegged at $156.2 million, indicating a 28.4% improvement from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space are Intuitive Surgical (ISRG - Free Report) , Medpace Holdings (MEDP - Free Report) and Boston Scientific (BSX - Free Report) .
Intuitive Surgical, sporting a Zacks Rank #1 (Strong Buy) at present, posted third-quarter 2025 adjusted earnings per share (EPS) of $2.40, exceeding the Zacks Consensus Estimate by 20.6%. Revenues of $2.51 billion topped the Zacks Consensus Estimate by 3.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.
ISRG has an estimated long-term earnings growth rate of 15.7% compared with the industry’s 11.9% growth. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 16.34%.
Medpace, currently carrying a Zacks Rank #2 (Buy), reported third-quarter 2025 EPS of $3.86, which surpassed the Zacks Consensus Estimate by 10.29%. Revenues of $659.9 million beat the Zacks Consensus Estimate by 3.04%.
MEDP has an estimated earnings growth rate of 17.1% for 2025 compared with the industry’s 16.6% growth. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 14.28%.
Boston Scientific, currently carrying a Zacks Rank #2, reported third-quarter 2025 adjusted EPS of 75 cents, which surpassed the Zacks Consensus Estimate by 5.6%. Revenues of $5.07 billion outperformed the Zacks Consensus Estimate by 1.9%.
BSX has an estimated long-term earnings growth rate of 16.4% compared with the industry’s 13.5% growth. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 7.36%.