TMDX

TransMedics is a genuinely high-quality compounder that the market has repriced hard. Revenue has gone $30M→$93M→$242M→$442M→$605M over five years, still growing 37% in FY2025 on 59.9% gross margins, and the company has crossed decisively into GAAP profitability ($109M operating income, +189.6%) with 40.2% ROE, $489M cash and $193M of operating cash flow. This is the asset-heavy 'organ procurement as a service' model paying off: the OCS razor-and-blade disposables plus the National OCS Program (logistics, aircraft) are scaling into real operating leverage. At $67.29 the stock trades at just 3.8x sales — cheap for a profitable 37% grower — and FCF (OCF $193M less $59.3M capex) is a ~5.8% yield on the $2.31B cap.

The key tell is in the filing: a conditional conversion of the 1.50% notes was triggered on December 31, 2025 because the shares traded at or above 130% of the $94 conversion price (~$122) for 20 days. The stock is now $67 — roughly a 45% drawdown from those Q4 levels. The data provided doesn't tell us why the market deserted it (no news is supplied), so part of this call rests on the premise that the selloff is multiple compression rather than a fundamental break the numbers haven't yet captured; that uncertainty is why conviction is moderate, not high.