Initiation of Coverage TransMedics Group Inc: Getting Organ-ized. Initiate Neutral at $80 PT.

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Initiation of Coverage TransMedics Group Inc: Getting Organ-ized. Initiate Neutral at $80 PT.

TransMedics Group Inc UBS Research

UBS Research THESIS MAP Thesisa guideMapto our thinking and what´s where in this report

Pivotal Questions Q: Can upcoming catalysts support growth for TMDX?

Yes, we think kidney, heart DBD, and OUS are all material enough to matter to TMDX and support

growth above the Street longer term (our analysis suggests >$1B incremental TAM). The main issue is

that many of these catalysts are likely only to be notable in numbers after 2028, leaving a larger gap

before getting paid on them.

Q: Is vertical integration a good idea for TMDX?

We think so. Our new work suggests a 7-15% ROIC potential on higher OCS utilization and cost

outs. The main challenge is managing the competitive response from incumbent OPOs short-term.

Q: What's the risk of the competitive environment look like?

Manageable, but with some short term risk. We're more sanguine on NRP, and Bridge-to-Life as our

maths only overlaps c. 30-40% coverage with TMDX in liver (though visibility on pressure is low), but

long-term we expect the integrated model to win out.

UBS VIEW Our Neutral rating is predicated on our view that, at a high level, we think TMDX is in good shape,

with some c. $1.2bn in incremental sales opportunities across OUS, kidney, and DBD heart, as well as

potential to vertically integrate with the DSAs / OPOs and drive value. Equally, with the stock

comparatively cheap vs. history (c. 3x 2-yr forward sales for mid-teens growth), we do see some

upside potential. The challenge is the big opportunities to growth are all longer term (2028 plus)

whereas the competitive questions and short-term volume visibility sit within the next 12 months,