rewrite this title TransMedics: Disrupting Organ Transplant Tech and Logistics – Nanalyze

When you have published more than 2,500 articles and nearly 1,000 videos on emerging technology companies, you develop a keen intellect for finance and an adoring fanbase that lives and dies by your every word. Well, we’ve at least figured out a thing or two when it comes to retail investing and some of you believe in the value of that experience by supporting our platform. That’s because you trust us not to sugarcoat our analyses or play the shell game with our stock picks like some Foolish investors out there.

This is especially important because it requires all of our attention to track a company’s trajectory, especially when they suddenly take a hard turn away from the core business – also known as a pivot. The regular readers who help us pay the bills know that we like to dive deep into stocks that suddenly and significantly shift their business. Many pivots totally make sense, such as IBM’s acquisition of Red Hat, in an attempt to pivot from hardware into software. Other pivots are tenuous at best. Take the decision by TuSimple – once a leading self-driving truck company – into video game development. (Incidentally, we’re due for an update on the whole autonomous truck market in the next few weeks, so stay tuned.)

The TransMedics Pivot

These and other examples are why we originally met a major pivot by TransMedics (TMDX) last year with some amount of skepticism. A medical technology (medtech) company, TransMedics has developed a unique organ preservation system that enables livers, hearts, and lungs to be transported in a living, functioning state rather than in cold storage. The result is that organs can travel longer and farther with better patient outcomes. If Dr. Victor Frankenstein had access to the Organ Care System (OCS) rather than a pickled brain in a jar, things might have turned out differently. Just saying.

When we first covered TransMedics, most of the revenue came from consumables used to support each organ. To a lesser extent, the company generated service revenue by providing an end-to-end transplant logistics solution under what it called the National OCS Program (NOP), beginning around 2022. Services revenue accounted for about 15% of total revenue back then. But then in August 2023, TransMedics acquired Summit Aviation, a fixed-wing fleet now dedicated to transporting organs across the United States. At the end of 2024, services represented 38% of revenue, and nearly 99% of the business now runs through NOP. The pivot into logistics left us wondering if there was much growth left in the tank. 

Pivoting Toward Profitability

On the surface, the pivot appears to be paying off. Total revenue for 2024 was $441.5 million, up 83% year-over-year from nearly $242 million. The company even became profitable last year, pocketing $35.5 million. TransMedics completed a record 3,715 U.S. OCS cases in 2024, a 58% increase compared to the previous year. The company also claimed to own a nearly 21% market share across all three organ types, suggesting the immediate organ transplant market is valued at about $2.2 billion. However, that’s based on TransMedics’ revenue, which probably sits at the high end of costs. After all, how much can a couple 10-pound bags of ice really cost, even in the U.S. healthcare system?

The good times continued into 2025. Q2-2025 revenue clocked in at more than $157 million, up 38% from a year ago and about 10% from the previous quarter. Logistics revenue also continued to contribute significantly to the bottom line, thanks to the company’s new aircraft fleet, which now handles nearly 80% of all organ transport missions in the United States. While gross margins have suffered as the share of service revenue grows, TransMedics has been able to cut its transport costs by 50% for certain cases and enabled transplants within a two-hour radius of its 17 U.S. hubs. The selling point is that vertical integration has unlocked a previously inaccessible segment of the donor organ market, increasing the number and speed of available transplants while reducing reliance on third-party jets. 

Later this year, TransMedics will roll out NOP Connect, a digital platform designed to be the Uber for organ transplant logistics. It will serve as a real-time coordination, tracking, and management system for every aspect of the NOP’s organ retrieval and delivery network – helping further scale the business while offering new perks like advanced analytics.

Costs and Competition

It’s hard to argue with the results to date. TransMedics has now raised its full-year 2025 revenue guidance twice. The most recent target is revenue between $585 and $605 million, which would represent a 35% year-over-year increase at the midpoint. The company is sticking with its mid-term goal of supporting 10,000 transplants with $1.2 billion in revenue and a 30% operating margin by 2028. 

Premium Price

Based on those numbers, we can assume the average per-organ price (hardware, consumables, logistics, medical personnel, digital tracking) of moving internal body parts from one body to the next is about $120,000. TransMedics claims the cost is closer to $85,000 for liver and heart transplant consumables and services. Either way, the premium price tag might partly explain the company’s tepid efforts to expand outside of the United States, where $15 aspirin is the norm. Still, it’s worth reflecting on costs, especially given that one TransMedics operation can be an order of magnitude higher (10X) compared to standard cold storage without all of the bells and whistles of the end-to-end services. When it comes to outcomes, however, you get what you pay for:

TransMedics’ competitors are also better on price, though the TransMedics table above suggests there are a number of costs not factored into the base price. Again, none offer the range of services in one turnkey package. 

Key Competitors

One competitor is a Swedish medtech company called Xvivo Perfusion (XVIVO.ST), which has also developed perfusion-based storage devices and services that extend organ viability and reduce complications. It has also begun to offer more comprehensive logistics, including partnering with air service providers. However, TransMedics’s tech is mostly superior (24-hour liver viability versus six hours for Xvivo), though the Swedes are ahead in offering kidney transplant services. TransMedics hopes to roll out its own solution next year in a market category that management claims can more than double its 2028 projections for total transplants supported. Xvivo is also much smaller, with just $18 million in Q2-2025 revenue and a market cap of less than $600 million (TransMedics boasts a market cap of $4.2 billion).

A potentially more formidable competitor is OrganOx, a startup out of the UK that has raised more than $200 million, including a $160 million round back in February. OrganOx specializes in liver preservation with its Metra device, which provides 24-hour preservation and is approved by the FDA for liver transplants. Nearly three-quarters of TransMedics’ revenues are related to liver transplants. During the Q2-2025 earnings call, TransMedics president and CEO Walid Hassanain dismissed the OrganOX device as a real threat, noting that it “cannot fly even if you have to add wings to the device” and that it would be “too expensive to fly and ultimately the device doesn’t have the battery capability.”

The Long and Short of TransMedics Stock

Of course, pigs don’t fly either but someday they might be a ready source of human organs. Xenotransplantation is just one emerging technology that could disrupt TransMedics long term. Bioprinting organs on demand is another disruptive tech that is even further from technical success, let alone commercial viability. At present, though, there seems to be little to threaten TransMedics’ market leadership in organ transplant transportation technology and services. Indeed, its aggressive push into the logistics side of the business has quickly widened its substantial competitive moat.

Yet investors seem somewhat ambivalent on TransMedics stock. While TransMedics stock is up nearly 100% year to date, it is down more than 25% over the last year. This sort of volatility is why we don’t pay much attention to short-term stock performance. A more meaningful timeframe of five years shows the stock up almost 600% compared to just 88% for the Nasdaq. 

However, another metric that we rarely look at – the number of shares shorted – is unusually high. Currently, about a quarter of all shares of TransMedics stock are shorted, meaning about 25% of investors are betting on the stock’s decline. The ratio of shorted stocks to outstanding shares  for most small- and mid-cap companies is less than 5%. The percentage was more than 30% earlier this year, which led us down a rabbit hole.

At the bottom we found a 342-page short report by a firm called Scorpion Capital that alleged everything from racketeering and monopolistic practices to fraudulent billing and even organ trafficking by TransMedics. The company issued a rebuttal just days later, and internal and third-party reviews found no significant evidence of misconduct. However, the usual damage was done: The stock dropped in the near term and short-seller sharks are still circling the waters. With a simple valuation ratio of six, TransMedics is just under our catalog average of seven. That’s a lot of growth on offer for a reasonable price.

Conclusion

We’re not scared of sharks, but we’re still skeptical of the blue ocean opportunity for the organ preservation and transportation market. TransMedics is certainly gobbling up market share quickly, which is reflected in its revenue growth. But how long can it last? The best-case scenario: TransMedics successfully launches a kidney OCS next year, maybe acquires a competitor or two in Europe to tap that market, and continues to grow gross and net margins with help from its evolving digital platform. Combined with its current market position, TransMedics could continue its double-digit revenue growth to 2028 and beyond.