TransMedics Group Inc. Common Stock (TMDX)

FairStock Score: 63/100 — STEADY

Key Financials

Strengths

• Generates $94 million in annual free cash flow (2.4% yield on market cap)
• High return on equity of 54.2% demonstrating efficient capital deployment
• Altman Z-Score of 4.4 confirms minimal bankruptcy risk and strong solvency
• Healthy net profit margin of 17.4% showing consistent profitability
• Revenue growth of 32.2% demonstrates strong top-line momentum

Concerns

• Trades significantly above Graham Number ($39) with negative 189% margin of safety—limited downside protection

AI Analysis

TransMedics Group Inc. Common Stock is a small-cap healthcare company valued at $3.9 billion. The business generates $605 million in annual revenue with a 17.4% net margin and $94 million in free cash flow. From a quality standpoint, TransMedics shows healthy Altman Z-Score of 4.4 and extraordinary 54% return on equity. On valuation, the stock is reasonably priced at 23.3x earnings, with trades far above its Graham Number ($39) with no margin of safety. Growth dynamics show revenue growing at 32.2% and profit growth of 1436.9%. Our composite FairStock Score of 63/100 reflects above-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

TransMedics's 32% revenue growth trajectory could accelerate as it captures additional market share in the healthcare sector. With $94 million in annual free cash flow (2.4% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the healthcare space. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer