Value
6.3/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 7.2 |
| P/S | 7.4 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 5.4 |
| Analyst target | 9.0 |
- ▸Forward P/E: 23.5x
TMDX · Why this verdict
Why TransMedics Group (TMDX) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.3/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
TransMedics Group holds a wide economic moat in organ perfusion technology with 21% revenue growth, 45% return on equity, and 34.6% analyst-implied upside, but 33% short interest, a put/call ratio of 192.77, and declining earnings estimates create a high-risk setup that requires careful monitoring.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
TransMedics holds a wide economic moat — the highest quality tier in the scoring model — combined with return on equity of 45% and net margins of 27%, placing it among the best-in-class quality operators in the medical devices peer group with a quality rank score of 9.6 out of 10. Quality breakdown | Return on equity remains above 30% and net margin stays above 20% for at least 3 of the next 4 reported quarters. | →Stable |
| CounterA wide moat designation is based on current competitive positioning, but the company's reliance on third-party sterilization vendors is a concentration risk that could impair moat durability if supply chain disruptions occur. | ||
Revenue grew 21% year-over-year and three of the last four quarters delivered positive earnings surprises with an average of 47% positive surprise, including beats of 83%, 115%, and 41%, suggesting the core business is outperforming analyst models in most periods. Growth breakdown | Year-over-year revenue growth remains above 15% and beat count reaches at least 3 of the next 4 quarters. | →Stable |
| CounterThe most recent quarter missed by 50.9% and earnings estimates are now trending downward, indicating that the growth trajectory may be decelerating and analyst models are being revised lower. | ||
A put/call ratio of 192.77 is one of the most extreme bearish options postures seen in any individual stock, combined with 33% short interest creating a significant short-squeeze dynamic, while also representing enormous downside conviction from the market. Key risks | Put/call ratio falls below 10, declining more than 94% from the extreme current level of 192.77, signaling a normalization of the options market structure. | →Stable |
| CounterAt 33% short interest with a quality score of 7.5 out of 10, the short-squeeze potential is real — any positive earnings beat or catalyst could force rapid short covering and amplify upside. | ||
Analyst consensus implies 34.6% upside to a target of $101.60 from the current $75.48, and the asymmetry ratio of 2.31 clears the minimum bar, suggesting the risk-reward is favorable on a 12-month price basis despite near-term headwinds. Targets | Price rises above $90 within 12 months, closing more than 55% of the gap toward the analyst target of $101.60. | →Stable |
| CounterAnalyst targets were set when estimates were higher; with earnings estimates now trending downward, targets may be revised lower before the upside gap can be closed. | ||
TransMedics holds a wide economic moat — the highest quality tier in the scoring model — combined with return on equity of 45% and net margins of 27%, placing it among the best-in-class quality operators in the medical devices peer group with a quality rank score of 9.6 out of 10.
→StableQuality breakdown
- Expectation
- Return on equity remains above 30% and net margin stays above 20% for at least 3 of the next 4 reported quarters.
CounterA wide moat designation is based on current competitive positioning, but the company's reliance on third-party sterilization vendors is a concentration risk that could impair moat durability if supply chain disruptions occur.
Revenue grew 21% year-over-year and three of the last four quarters delivered positive earnings surprises with an average of 47% positive surprise, including beats of 83%, 115%, and 41%, suggesting the core business is outperforming analyst models in most periods.
→StableGrowth breakdown
- Expectation
- Year-over-year revenue growth remains above 15% and beat count reaches at least 3 of the next 4 quarters.
CounterThe most recent quarter missed by 50.9% and earnings estimates are now trending downward, indicating that the growth trajectory may be decelerating and analyst models are being revised lower.
A put/call ratio of 192.77 is one of the most extreme bearish options postures seen in any individual stock, combined with 33% short interest creating a significant short-squeeze dynamic, while also representing enormous downside conviction from the market.
→StableKey risks
- Expectation
- Put/call ratio falls below 10, declining more than 94% from the extreme current level of 192.77, signaling a normalization of the options market structure.
CounterAt 33% short interest with a quality score of 7.5 out of 10, the short-squeeze potential is real — any positive earnings beat or catalyst could force rapid short covering and amplify upside.
Analyst consensus implies 34.6% upside to a target of $101.60 from the current $75.48, and the asymmetry ratio of 2.31 clears the minimum bar, suggesting the risk-reward is favorable on a 12-month price basis despite near-term headwinds.
→StableTargets
- Expectation
- Price rises above $90 within 12 months, closing more than 55% of the gap toward the analyst target of $101.60.
CounterAnalyst targets were set when estimates were higher; with earnings estimates now trending downward, targets may be revised lower before the upside gap can be closed.
Per-dimension breakdown
Quality
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 3.5 |
| Gross margin | 7.8 |
| Op margin | 3.1 |
| Net margin | 10.0 |
| Current ratio | 6.3 |
| FCF quality | 4.9 |
| Moat | 7.5 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 45%
- ▸Strong margins: 27%
- ▸Earnings quality warning: 63% FCF/NI
- ▸Wide economic moat
Growth
3.9/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 7.8 |
| EPS growth | 0.0 |
- ▸Strong growth: 21% YoY
Momentum
3.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.7 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 4.0 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -5.8%/30d — confirmed downtrend
Sentiment
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.9 |
| Price target | 9.5 |
| erm sentiment | 3.6 |
- ▸Light analyst coverage (9.0) — signal dampened
- ▸Analyst upside: 48%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
5.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.7 |
| quality rank | 9.6 |
| growth rank | 8.3 |
- ▸Attractive P/E vs peers
- ▸Superior ROE vs peers
Technical
0.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.7 |
| support resistance | 0.9 |
| 52w position | 0.2 |
Risk (lower is worse)
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 10.0 |
| days to cover | 6.8 |
| volatility | 0.0 |
| put call | 4.6 |
| implied vol | 2.4 |
| max pain risk | 7.0 |
| beta | 3.7 |
| debt equity | 3.5 |
- ▸Short squeeze setup: 33% short, quality 7.5
- ▸High IV: 65%
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 3.5 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
- ▸Strong earnings: 3B/1M
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- ASYMMETRY:1.9>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:35d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:3.7<4.5
- DEATH_CROSS:HARD_BLOCK
Warning (0)
none
Reward-to-Risk
1.91
Upside
+28.7%
Downside
15.0%
Sizing output
AVOID
SetupRECOVERY — Death cross but MACD improving, RSI 63
EdgeNO_EDGE — No clear edge identified
SuitabilityAGGRESSIVE — Beta 1.88>1.3, MCap $2.7B<$5B
Investment implication
The F-path SELL output reflects an overall score of 4.3 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Quality at 6.8) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:3.7<4.5, DEATH_CROSS:HARD_BLOCK) reinforce the read. Current asymmetry R:R is 1.91 — supplementary context, not the trigger for this path.
The strongest dimensions are Quality at 6.8, Sentiment at 6.8, and Value at 6.3; the weakest are Technical at 0.6, Momentum at 3.7, and Growth at 3.9. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of 1.91 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1TransMedics holds a wide economic moat — the highest quality tier in the scoring model — combined with return on equity of 45% and net margins of 27%, placing it among the best-in-class quality operators in the medical devices peer group with a quality rank score of 9.6 out of 10.
Trip ifReturn on equity falls below 20%, declining more than 55% from the current 45%, signaling meaningful deterioration in capital efficiency.
- P2Revenue grew 21% year-over-year and three of the last four quarters delivered positive earnings surprises with an average of 47% positive surprise, including beats of 83%, 115%, and 41%, suggesting the core business is outperforming analyst models in most periods.
Trip ifYear-over-year revenue growth falls below 10% in at least 2 of the next 4 quarters, signaling significant deceleration from the 21% pace.
- P3A put/call ratio of 192.77 is one of the most extreme bearish options postures seen in any individual stock, combined with 33% short interest creating a significant short-squeeze dynamic, while also representing enormous downside conviction from the market.
Trip ifShort interest rises above 40%, exceeding the already elevated 33% by more than 7 percentage points, confirming a deepening of bearish positioning.
- P4Analyst consensus implies 34.6% upside to a target of $101.60 from the current $75.48, and the asymmetry ratio of 2.31 clears the minimum bar, suggesting the risk-reward is favorable on a 12-month price basis despite near-term headwinds.
Trip ifAnalyst consensus price target falls below $65, more than 13% below the current price of $75.48, removing the upside asymmetry entirely.