Should I Buy Transmedics (TMDX)? Finance YouTuber Analysis

The YouTuber identifies Transmedics as a growth company with a good value, despite recent stock volatility. He points to its 38% 3-year CAGR and 80% 5-year CAGR, along with a forward P/E of 27 and EV/Sales of 3.5. He believes its mission to make organ transplants more viable and its expanding device portfolio offer significant long-term tailwinds, comparing it to an early Intuitive Surgical.

“But Transmetics, volatile stock to say the least, down 61% from its all-time high. But this is now getting to be a stock that is a pretty good value.”

The YouTuber highlights TransMedics' FDA-cleared monopoly in warm perfusion organ transport, with significant optionality from new organ clearances (like kidneys) and next-generation machines. Despite concerns about high costs and potential alternatives, the company has significantly grown its market share. A reverse DCF, using a conservative 20% free cash flow margin, suggests it needs to grow revenue by only 8% annually over the next decade, far below its projected growth rate of 31% by 2030.

“The thing that I would point out is the fact that TransMedics has shown that they that they believe that they can grow very fast. Right now they're sitting at around 5,000 transplants last year. They believe that they could reach uh 20,000 transplants by the end of 2030.”

The analyst believes Transmedics, despite recent earnings misses and margin pressure, presents a compelling long-term buying opportunity. The company is investing heavily in R&D for new organ solutions (heart, lung, kidney) and expanding internationally. While current valuation is based on future growth and approvals, a blended valuation model suggests a significant annualized return if the company meets its base case guidance for transplants by 2030, offering a large margin of safety.

“I think that if the company can get the approvals that they're looking for, and if the company can show that those new products are being adopted, then today is going to be a steal of a price to own this company.”

The YouTuber added to Transmedics after the company updated its guidance for 20,000 to 30,000 transplants by the end of 2030. Based on a total addressable market valuation, he believes it could be an $11-12 billion company by 2030, up from its current sub-$4 billion valuation.

“When the company updated their guidance late last year for 20 to 30,000 transplants by the end of 2030, I ran a a total addressable market valuation on this and I think this could be an 11 to 12 billion company by the end of 2030. Today it's below $4 billion.”

The YouTuber is holding TransMedics, believing it offers a risk-adjusted annual return of 21% by 2030, double the market's return. This is based on a total addressable market analysis with weighted scenarios (bear, base, bull) for organ transplants, considering management's significantly increased guidance. He acknowledges competitive and reimbursement risks but is comfortable with his current allocation to this small-cap stock.

“I already own a lot of this stock and I'm just perfectly comfortable sitting on it given my allocation to this small cap stock.”

The YouTuber is buying Transmedics, believing it to be a cheap growth stock with significant upside. He bases this on updated management guidance for organ transplants by 2030 (20,000-30,000 vs. previous 10,000 by 2028), the potential addition of kidney transplants, and a detailed valuation model projecting over 20% annual returns. He also acknowledges risks like FDA approval for kidneys and reimbursement rates.

“Today's $4.3 billion company could be worth 11.3 billion by the end of 2030. Now remember, the stock market returns roughly 10% every year over a long enough time frame. But using this math, which I believe was fair, if tilting slightly towards conservative, we're looking at over 20% returns per year for the next five years. So that is very attractive to me.”

The YouTuber finds Transmedics a very interesting business with strong revenue growth and a significant market moat, but believes the stock is overvalued. Its high P/E and P/FCF ratios are pricing in continued strong growth even as revenue growth rates are decelerating.

“So I don't necessarily think that it is offering a ton of value right now. But this is a very interesting business that I have added to my watch list in case it does see some dramatic drop like it did at the beginning of 2025 once again.”