Market Sentiment Around Loss-Making TransMedics Group, Inc. (NASDAQ:TMDX)
We feel now is a pretty good time to analyse TransMedics Group, Inc.'s (NASDAQ:TMDX) business as it appears the company may be on the cusp of a considerable accomplishment. TransMedics Group, Inc., a commercial-stage medical technology company, engages in transforming organ transplant therapy for end-stage organ failure patients in the United States and internationally. The US$2.5b market-cap company announced a latest loss of US$36m on 31 December 2022 for its most recent financial year result. The most pressing concern for investors is TransMedics Group's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
View our latest analysis for TransMedics Group
TransMedics Group is bordering on breakeven, according to the 5 American Medical Equipment analysts. They expect the company to post a final loss in 2024, before turning a profit of US$16m in 2025. The company is therefore projected to breakeven around 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 78% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving TransMedics Group's growth isn’t the focus of this broad overview, but, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 31% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of TransMedics Group which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at TransMedics Group, take a look at TransMedics Group's company page on Simply Wall St. We've also put together a list of pertinent aspects you should further research:
Valuation: What is TransMedics Group worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether TransMedics Group is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on TransMedics Group’s board and the CEO’s background.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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