TransMedics Group, Inc. (TMDX): A Bull Case Theory

We came across a bullish thesis on TransMedics Group, Inc. on Johnny's bearish Investing’s Substack. In this article, we will summarize the bulls’ thesis on TMDX. TransMedics Group, Inc.'s share was trading at $138.97 as of January 28th. TMDX’s trailing and forward P/E were 55.51 and 58.82 respectively according to Yahoo Finance.

TransMedics Group (TMDX) is a U.S.-based medtech company that has built a differentiated position in organ transplantation through its Organ Care System , a portable normothermic perfusion platform that improves organ viability and expands the pool of transplantable organs. The company has transitioned from selling hardware outright to a recurring-revenue, full-service model in which it retains ownership of Organ Care System consoles and generates revenue from high-margin single-use consumables, integrated logistics, and clinical services via its National Organ Care System Program.

This end-to-end approach, combined with training and certification of hospital staff, creates meaningful switching costs and embeds TransMedics deeply within transplant center workflows. Organ Care System technology is widely viewed as superior to competing systems, with FDA approvals across heart, lung, and liver transplants, and kidney applications expected in 2027. By extending preservation times and reducing cold ischemia, TransMedics addresses systemic inefficiencies that leave tens of thousands of donated organs unused each year, effectively expanding the overall transplant market.

Financially, the company reached profitability in 2024 and continued to scale in 2025, with Q3 revenue of $144 million, gross margins near 60%, and operating leverage as consumables outgrow services. TransMedics currently holds roughly 19% share in U.S. heart, lung, and liver transplants, with a credible path toward materially higher penetration. Entry into kidney transplants and potential international expansion could significantly expand the addressable market, though Europe remains uncertain due to existing protocols and lower-cost alternatives.

While risks include capital intensity from logistics, reimbursement dynamics, and competitive threats, management’s long-term targets—30% operating margins and sharply higher transplant volumes—support a compelling multi-year growth and valuation outlook, with upside driven primarily by U.S. penetration and kidney market entry.

Previously, we covered a bullish thesis on TransMedics Group, Inc. (TMDX) by Oliver | MMMT Wealth in May 2025, which highlighted the company’s warm perfusion technology, expanding transplant viability, integrated logistics model, and near-term earnings catalysts. TMDX's stock price has appreciated by approximately 45.04% since our coverage due to improving profitability and adoption momentum. Johnny’s bearish Investing shares a similar thesis but emphasizes margin scalability, penetration, and long-term valuation.

TransMedics Group, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 34 hedge fund portfolios held TMDX at the end of the third quarter which was 35 in the previous quarter. While we acknowledge the potential of TMDX as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.