TransMedics Group, Inc. (NASDAQ:TMDX) Just Reported Full-Year Earnings And Analysts Are Lifting Their Estimates
A week ago, TransMedics Group, Inc. (NASDAQ:TMDX) came out with a strong set of full-year numbers that could potentially lead to a re-rate of the stock. Results overall were credible, with revenues arriving 5.8% better than analyst forecasts at US$242m. Higher revenues also resulted in lower statutory losses, which were US$0.77 per share, some 5.8% smaller than the analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for TransMedics Group
After the latest results, the five analysts covering TransMedics Group are now predicting revenues of US$366.4m in 2024. If met, this would reflect a huge 52% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 47% to US$0.41. Before this latest report, the consensus had been expecting revenues of US$330.2m and US$0.68 per share in losses. 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.
The consensus price target rose 13% to US$101, with the analysts encouraged by the higher revenue and lower forecast losses for next year. 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. The most optimistic TransMedics Group analyst has a price target of US$105 per share, while the most pessimistic values it at US$95.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of TransMedics Group'shistorical trends, as the 52% annualised revenue growth to the end of 2024 is roughly in line with the 55% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 7.8% per year. So it's pretty clear that TransMedics Group is forecast to grow substantially faster than its industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on TransMedics Group. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for TransMedics Group going out to 2026, and you can see them free on our platform here..
It might also be worth considering whether TransMedics Group's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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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.
