Value
6.2/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 7.6 |
| P/S | 7.7 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 4.9 |
| Analyst target | 9.0 |
- ▸Forward P/E: 25.7x
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.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score5.9/10
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. | Tripped→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. | ↓Deteriorating |
| 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. | ↑Improving |
| 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.
Tripped→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.
↓DeterioratingKey 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.
↑ImprovingTargets
- 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
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 6.8 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 4.1 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -5.4%/30d — confirmed downtrend
Sentiment
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.9 |
| Price target | 9.7 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (9.0) — signal dampened
- ▸Analyst upside: 58%
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.9 |
| quality rank | 9.7 |
| growth rank | 6.9 |
- ▸Attractive P/E vs peers
- ▸Superior ROE vs peers
Technical
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.5 |
| support resistance | 4.6 |
| 52w position | 0.0 |
| gap | 5.0 |
Risk (lower is worse)
3.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 10.0 |
| days to cover | 3.8 |
| volatility | 1.1 |
| put call | 0.0 |
| implied vol | 0.0 |
| beta | 3.7 |
| debt equity | 3.5 |
- ▸Short squeeze setup: 36% short, quality 7.5
- ▸Elevated put/call: 2.40
- ▸High IV: 91%
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
- ▸Strong earnings: 3B/1M
- ▸Earnings in 11 days
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:6.3>=5.5
- ASYMMETRY:3.6>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (2)
- DEATH_CROSS:momentum=6.3>=5.0 recovering
- EARNINGS_PROXIMITY:11d<=14d (soft)
Reward-to-Risk
3.63
Upside
+37.3%
Downside
10.3%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 53
EdgeCatalyst-Driven — Earnings in 11d with 3/4 beat streak
SuitabilitySpeculative — Drawdown -54% (>40% off 52w high)
Investment implication
The F-path SELL output reflects an overall score of 4.9 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Sentiment at 7.3) was not enough to lift the adjusted overall above the threshold. Current asymmetry R:R is 3.63 — supplementary context, not the trigger for this path.
The strongest dimensions are Sentiment at 7.3, Insider at 7.3, and Quality at 6.8; the weakest are Risk (lower is worse) at 3.2, Technical at 3.5, and Growth at 3.9. The V9 engine cleared all gates with 2 warnings, producing an asymmetric reward-to-risk of 3.63 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Wide Moat High Roe
Trip ifReturn on equity falls below 20%, declining more than 55% from the current 45%, signaling meaningful deterioration in capital efficiency.
- P2Revenue Growth MomentumTripped
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.
- P3Extreme Bearish Positioning
Trip ifShort interest rises above 40%, exceeding the already elevated 33% by more than 7 percentage points, confirming a deepening of bearish positioning.
- P4Analyst Upside Recovery Path
Trip ifAnalyst consensus price target falls below $65, more than 13% below the current price of $75.48, removing the upside asymmetry entirely.