Investors are justifiably excited after TransMedics turned in a promising quarterly update.
Shares of TransMedics (TMDX 24.93%) soared 27.3% higher as of 1:50 p.m. ET on Wednesday as the organ transplant innovator easily exceeded first-quarter 2024 expectations.
Growing revenue by 133% in Q1 to $97 million, the company rocketed past Wall Street estimates of $81 million in sales. Furthermore, TransMedics delivered generally accepted accounting principles (GAAP) earnings per share (EPS) of $0.35 — a pleasant surprise to the negative $0.05 analysts had expected.
A magnificent first quarter from TransMedics
Providing Organ Care Systems (OCS) for heart, lung, and liver donations, TransMedics continues to see incredible demand for its life-saving products. After increasing sales by 133% in Q1, the company has recorded eight consecutive quarters of triple-digit growth.
Remarkably, despite this incredible growth, TransMedics has streamlined its profitability, generating a 13% net profit margin during its most recent quarter. One critical component helping the company reach this newfound profitability is its recently formed transplant logistics service.
This logistics unit, consisting of 14 company-owned aircraft, saw sales grow by 58% quarter over quarter, accounting for $15 million in revenue during Q1. This unit accounted for 49% of the company’s flight missions for donations in Q1, providing valuable cost efficiencies and making TransMedics less reliant upon outside entities for transportation.
Is TransMedics stock a buy?
The company’s OCS products continue to provide superior efficacy compared to traditional ice storage options. This disruptive technology gives the company a first-mover advantage in the $15 billion global transplant industry, making its $3 billion market cap relatively diminutive by comparison.
While investors can’t expect TransMedics to continue doubling its revenue every quarter, its intention to grow the number of Food and Drug Administration (FDA) clinical indications it has in the U.S. could reward investors willing to hold for decades.
