This Just In: Analysts Are Boosting Their TransMedics Group, Inc. (NASDAQ:TMDX) Outlook for This Year

Celebrations may be in order for TransMedics Group, Inc. (NASDAQ:TMDX) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analysts modelling a real improvement in business performance.

Following the upgrade, the current consensus from TransMedics Group's six analysts is for revenues of US$196m in 2023 which - if met - would reflect a major 29% increase on its sales over the past 12 months. Losses are presumed to reduce, shrinking 15% per share from last year to US$0.46. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$174m and losses of US$0.70 per share in 2023. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.

See our latest analysis for TransMedics Group

Despite these upgrades, the analysts have not made any major changes to their price target of US$96.20, implying that their latest estimates don't have a long term impact on what they think the stock is worth. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on TransMedics Group, with the most bullish analyst valuing it at US$110 and the most bearish at US$81.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that TransMedics Group's rate of growth is expected to accelerate meaningfully, with the forecast 68% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 48% p.a. 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 7.9% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect TransMedics Group to grow faster than the wider industry.

The Bottom Line

The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting TransMedics Group is moving incrementally towards profitability. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So TransMedics Group could be a good candidate for more research.

Better yet, TransMedics Group is expected to break-even soon - within the next few years - according to analyst forecasts, which would be a momentous event for shareholders. For more information, you can click through to our free platform to learn more about these forecasts.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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.