Tuesday, organ transplant-medical device firm TransMedics Group Inc (NASDAQ:TMDX) reported first-quarter EPS of 35 cents, a turnaround from an EPS loss of 8 cents a year ago, beating the consensus of a loss of 5 cents. 

The company reported sales of $96.85 million, up 133% Y/Y, beating the consensus of $83.8 million, primarily due to the increase in utilization of the Organ Care System (OCS) across all three organs through the National OCS Program (NOP) as well as additional revenue generated by the addition of TransMedics logistics services.

The gross margin for the first quarter of 2024 was 62%, compared to 69% in the first quarter of 2023 and 59% in the fourth quarter of 2023. 

Guidance: TransMedics raised its fiscal 2024 revenue guidance to $390 million-$400 million, up 61%-66% Y/Y, versus prior guidance of $360 million-$370 million and the consensus of $366.9 million.

William Blair views the first-quarter results and updated 2024 outlook as quite strong, and writes that TransMedics is “one of the best organic growth stories in their coverage universe.”

The analysts commend the integration of the National Organ Program (NOP) and the successful establishment of the aviation business, which is seen as boosting demand and enhancing the company’s competitive advantage. 

The recent positive data presented at The International Society for Heart and Lung Transplantation is noted to generate ongoing interest in TransMedics’ OCS/NOP solutions among global transplant programs. Additionally, management’s announcement of three new clinical programs starting in late 2024 and early 2025 is seen as promising future catalysts by William Blair.

William Blair maintains the Outperform rating and sees the stock as a solid long-term growth holding.

Price Action: TMDX shares are up 27.3% at $119.90 at the last check Wednesday.

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