TransMedics Group, Inc. (TMDX, Financial) has been on a losing streak, with its stock price declining for nine consecutive days, down approximately 12% over this period. Investors appear to be reassessing the company's current valuation ahead of its Q3 2024 earnings report, set to be released on Monday, October 28th. The sharp decline has sparked concerns that the market may be pricing in uncertainty, particularly as the company faces high expectations for its upcoming financial performance.
The medical technology company is expected to post quarterly earnings of $0.29 per share, a sharp turnaround from the -$0.78 per share reported in the same quarter last year. Revenues are anticipated to reach $115 million, representing a substantial 73% growth year-over-year. TransMedics continues to leverage its FDA-approved multi-organ technology platform, which positions the company to dominate a critical segment of the healthcare market.
However, with a market capitalization hovering around $4.2 billion, the stock's valuation has come into question. TransMedics is trading at approximately 11.8x its trailing 12-month revenue of $358.75 million and a forward P/E ratio of 65.1x. While these multiples are not entirely unusual for high-growth MedTech companies, they underscore the high expectations surrounding the firm's growth trajectory.
