The overall transplant volume was just released and looks very good.
DCD transplants up 51% YoY and 32% MoM
Liver DCD transplants up 53% YoY
Heart DCD transplants up 44% YoY
Lung DCD transplants up 47% YoY
TMDX dominates the DCD market so its very bullish.
Nice to see TMDX up 1% today in a tough tape day and up 15% ytd. Recession & Tariff Proof stock that is undervalued and easy to track revenue, doesn’t get much better than that!
Thank you Jeff. Based on the business, on first blush, it would seem that the current tariff noise would not have as much of an impact on TMDX. If true, that and positive sales/productivity #s should bode well for them.
TMDX is up 33% ytd. TMDX up 53% from the January lows. Q2 flights off to a very strong start.
Jonah did a nice post this morning about TMDX
“Now we look at Q2 flight data and it’s incredibly strong, in fact April flights through 13+ days is already up 21% from Q1 average daily flights. I have no idea if Q2 flight data will stay this strong for the next 2.5 months but the strong Q1 (flight data & transplant data) and the strong Q2 start certainly makes it seem inevitable that $TMDX will not only crush Q1 estimates but also raise full year guidance from 20-25% growth to 25-30% growth (might not be the only raise this year) Considering the 30% short interest, I think we’re about to see some fireworks with $TMDX over the next few months.”
Full Tweet:
TMDX is my highest-confidence position by far. Tariffs and/or a recession should have minimal impact on growth. The flight data indicates they are going to have a great 1Q, and Q2 is off to a great start.
Tmdx is my #1 position. I am worried that they could be affected by cuts to Medicare but they save so much money over organs in ice hopefully it doesn’t get affected. Every company has risks, can’t be blind to them. We date our stocks, we don’t marry them. I try to avoid the fanboy mentality, no company is immune to challenges for very long.
I have been getting interested in Transmedics again because of this impressive early data coming out about the number of total transplant surgeries and plane flights. However, when I review their previous report there are still a lot of concerns coming up from my viewpoint. Feel free to challenge any of these points,
Transmedics used to be my largest position at one point back in 2023. One of the reasons I liked the company was the previous CFO seemed like a shark for operating the plane business, and I didn’t understand why he got demoted because he still works at the company. I am tempted to take a position before earnings based on the data, but still a lot of questions from my viewpoint if the business has really recovered yet.
Revenues were up 83% so of course OpEx and SG&A are going to be higher. The fact they are growing only half as fast as revenues is a testament to TMDX’s financial discipline. R&D should be higher because they are getting ready to launch Kidney OCS.
Overall, in my view the story is about the strong flight numbers, strong demand from the total Organ market, improved efficiency in managing the fleet, and OCS 2.0 as a strong catalyst for growth in the back half of the year.
Good breakdown. Two clarifications:
In fairness to management, they had always noted 2nd half softness through the summer and holidays including Christmas. The problem is in FY22 and FY23, it didn’t stop the march of increased volume and revenue. FY24 saw not only TMDX’s revenue decline sequentially but overall transplants drop by 5%. That clearly caught management off guard and makes me wonder if TMDX has already harvested the low hanging fruit of unused organs and now bumped up against the capacity of clinics and/or surgeons to handle the extra availability during the second half vacation lull.
This is true. And even with the new CFO, I’ve understood management’s focus shifting from building out the fleet to optimizing usage including extra flight crews so the planes can be double shifted.
Like @wpr101, I’ve never quite gotten comfortable with how the CFO switch has played out. My gut says at least part of it was fallout for missing the 5% volume decline after beating so consistently previously. As I wrote in the past, they had plenty of room to raise the FY24 guide after Q2 and Q3 without running into having to restate down. IMO, that would have been a much better option for maintaining confidence in management. As it is, they put themselves in a position where their vision and understanding of the transplant market might not be as accurate as originally presented.
I was briefly back in to TMDX under $70, but admittedly sold out back above $80. The stock has had a pretty large pre-earnings run, and I believe the market has now priced in a significant beat and raise. I’m willing to wait for the actual numbers from these levels and reassess.