They completed 2,300 OCS transplants in 2023. So 10,000 in 2027 would be a 45% growth CAGR.
If they do that, what PE would be likely? A 43 PE would give them a ~$300 stock price after 2027, roughly a double from today. That’s something like a 19% return per year for shareholders. If they were trading for $100 today, and the math implied a triple if all this works out, which would be a 32% return per year for shareholders, I’d be a lot more interested.
Of course maybe TMDX can do even better than 10,000 transplants by 2027, but I don’t want to count on that. And certainly the PE could be higher, but if they’re growing at 30-something percent or less in 2027, I don’t really see why it should be.
Obviously these numbers are very speculative and we can’t know what the next 3.5 years will look like. But they reinforce my inclination to stay on the sidelines at ~$150/share. As with CRWD at almost $400, seemingly all the good quarters and years to come in the near future are mostly priced in. Both may beat the market if everything goes perfectly, but not by a lot. And of course, there’s some risk that not everything goes perfectly.
I think it makes sense to be trimming TMDX and taking some gains at ~$150/share. A small position (or no position) seems sensible, as I would expect there to be an opportunity to pick up shares cheaper at some point. Then again, I could just be wrong as I have been so far with CRWD. The market doesn’t really care about the math in the short term.
Bear