Brokers Are Upgrading Their Views On TransMedics Group, Inc. (NASDAQ:TMDX) With These New Forecasts

TransMedics Group, Inc. (NASDAQ:TMDX) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.

Following the upgrade, the current consensus from TransMedics Group's five analysts is for revenues of US$175m in 2023 which - if met - would reflect a sizeable 47% increase on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 43% to US$0.50. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$158m and losses of US$0.82 per share in 2023. We can see there's definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to this year's revenue estimates, while at the same time reducing their loss estimates.

Check out our latest analysis for TransMedics Group

It will come as no surprise to learn that the analysts have increased their price target for TransMedics Group 5.8% to US$91.20 on the back of these upgrades. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic TransMedics Group analyst has a price target of US$99.00 per share, while the most pessimistic values it at US$81.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting TransMedics Group is an easy business to forecast or the underlying assumptions are obvious.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting TransMedics Group's growth to accelerate, with the forecast 67% annualised growth to the end of 2023 ranking favourably alongside historical growth of 44% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 8.3% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that TransMedics Group is expected to grow much faster than its industry.

The Bottom Line

The most important thing here is that analysts reduced their loss per share estimates for this year, reflecting increased optimism around TransMedics Group's prospects. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at TransMedics Group.

It's great to see the analysts upgrading their estimates, but the biggest highlight to us is that the business is expected to become profitable in the foreseeable future. For more information, you can click through to our free platform to learn more about these forecasts.

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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.