It has been about a month since the last earnings report for TransMedics (TMDX). Shares have lost about 1.9% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is TransMedics due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent drivers for TransMedics Group, Inc. before we dive into how investors and analysts have reacted as of late.
TransMedics Q2 Earnings & Revenues Beat Estimates
TransMedics delivered earnings per share of 92 cents in the second quarter of 2025, which surged 162.9% year over year. The figure surpassed the Zacks Consensus Estimate by 91.7%.
TMDX’s Revenues in Detail
TransMedics registered revenues of $157.4 million in the second quarter, up 37.7% year over year. The figure surpassed the Zacks Consensus Estimate by 6.8%.
Per management, the uptick resulted from the increase in utilization of the Organ Care System (OCS), primarily in liver and heart through the National OCS Program (NOP), and additional revenues generated by the addition of TransMedics logistics services.
During the reported quarter, TMDX was able to cover 79% of its NOP missions requiring air transport compared with 78% in the first quarter of 2025.
TransMedics’ Segment Details
TMDX derives revenues via two sources — Net product revenue and Service revenue.
In the second quarter of 2025, Net product revenues totaled $96.1 million, up 33.9% year over year. Growth was driven by increased organ utilization in the liver and continued OCS adoption across both the liver and the heart.
Service revenues totaled $61.3 million, up 43.9% year over year, driven primarily by logistics.
Transplant Logistics’ services revenues for second-quarter 2025 were $29.8 million, up 56% year over year. This resulted from the continued expansion and utilization of TransMedics’ aviation fleet.
TMDX’s Margin Trend
In the quarter under review, TransMedics’ gross profit increased 39.4% year over year to $96.6 million. The gross margin expanded 78 basis points (bps) to 61%.
Selling, general and administrative expenses rose 2.8% year over year to $44.1 million. Research, development and clinical trials expenses surged 14.9% year over year to $15.9 million. Total operating expenses of $60 million increased 5.8% year over year.
Operating profit totaled $36.6 million, reflecting a 192.3% jump from the prior-year quarter. The operating margin in the second quarter expanded 1230 bps to 23.2%.
TransMedics’ Financial Position
TransMedics exited second-quarter 2025 with cash of $400.6 million compared with $310.1 million at the end of first-quarter of 2025. Total long-term debt at the end of second-quarter 2025 was $59.5 million compared with $59.4 million at the end of first-quarter 2025.
Cummulative net cash provided by operations at the end of the second quarter was $88.8 million compared with $22.3 million at the second quarter of 2024-end.
TMDX's Guidance
TransMedics has raised its revenue outlook for 2025.
For the full year, the company now expects revenues in the range of $585 million-$605 million (reflecting growth of 35% at the midpoint from the comparable 2024 figures). This is up from the prior outlook of $565 million to $585 million. The Zacks Consensus Estimate is pegged at $580.4 million.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a upward trend in fresh estimates.
The consensus estimate has shifted 18.67% due to these changes.
VGM Scores
At this time, TransMedics has a strong Growth Score of A, a score with the same score on the momentum front. However, the stock has a score of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, TransMedics has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
TransMedics belongs to the Zacks Medical - Instruments industry. Another stock from the same industry, Penumbra (PEN), has gained 7.7% over the past month. More than a month has passed since the company reported results for the quarter ended June 2025.
Penumbra reported revenues of $339.45 million in the last reported quarter, representing a year-over-year change of +13.4%. EPS of $0.86 for the same period compares with $0.64 a year ago.
For the current quarter, Penumbra is expected to post earnings of $0.91 per share, indicating a change of +7.1% from the year-ago quarter. The Zacks Consensus Estimate has changed -2.4% over the last 30 days.
Penumbra has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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TransMedics Group, Inc. (TMDX): Free Stock Analysis Report Penumbra, Inc. (PEN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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