The Case for Beaten-Down Stocks: Why Viking Therapeutics and TransMedics Could Be Long-Term Winners

The stock market is a fickle beast—one day, a company is the darling of Wall Street, and the next, it’s tossed into the discount bin like last season’s clearance rack. But just as thrift-store shoppers know, hidden gems often lurk beneath the dust. The same logic applies to investing: beaten-down stocks—those that have suffered steep declines—can offer outsized returns for patient investors willing to stomach short-term turbulence.
This strategy isn’t for the faint of heart. It requires nerves of steel, a long-term mindset, and a knack for spotting companies with solid fundamentals that the market has unfairly punished. Two such contenders in 2025? Viking Therapeutics (NASDAQ: VKTX) and TransMedics Group (NASDAQ: TMDX), both down sharply this year but packing serious potential. Meanwhile, The Motley Fool’s Stock Advisor has its own picks for future winners—proving that while timing the market is tricky, spotting undervalued opportunities can pay off big.

Why Beaten-Down Stocks Deserve a Second Look

1. The Psychology of Market Overreactions

Markets are emotional, prone to knee-jerk sell-offs when bad news hits—even if the long-term story remains intact. Investors often dump stocks after earnings misses, regulatory hiccups, or sector-wide slumps, creating artificial discounts for those who do their homework.
Take Viking Therapeutics, a biotech star in 2024 that’s now down 35% year-to-date. The sell-off seems dramatic, but the company’s clinical pipeline—including promising treatments for metabolic and endocrine disorders—hasn’t fundamentally weakened. Similarly, TransMedics Group, specializing in organ transplant tech, has dropped 31% in six months, yet its innovative organ care systems still address a critical, growing need.
The lesson? Short-term pain doesn’t always mean long-term doom.

2. Strong Fundamentals Can Outlast Temporary Setbacks

Not every downtrodden stock is a bargain—some are cheap for good reason. The key is distinguishing between broken businesses and temporarily bruised ones.
– Viking Therapeutics isn’t some fly-by-night biotech; its drug candidates (like VK2735 for obesity) have shown strong trial results, and its cash reserves ($963M as of Q1 2025) provide a long runway.
– TransMedics Group dominates a niche market with its Organ Care System (OCS), which keeps donor organs alive outside the body—a game-changer for transplant medicine. Revenue grew 48% year-over-year in its latest quarter, yet the stock keeps sinking.
These aren’t companies circling the drain; they’re undervalued growth stories caught in a market mood swing.

3. Historical Precedent: The Comeback Kids

For every Nvidia (up 25,000% since 2005) or Netflix (a 20,000% gain since 2004), there was a moment when skeptics wrote them off. The Stock Advisor team at The Motley Fool has a knack for spotting these rebounders early—though Viking and TransMedics didn’t make their latest top 10, past picks prove that patient investing in strong companies pays off.
Even Amazon crashed 95% during the dot-com bust before becoming a trillion-dollar giant. The pattern is clear: Market panic creates opportunity.

Risks and Realities: Not All Discounts Are Deals

Of course, buying the dip isn’t a guaranteed win. Biotech stocks like Viking are inherently volatile—clinical trials fail, FDA approvals get delayed, and competition lurks. TransMedics, while innovative, faces reimbursement hurdles in healthcare. And let’s not forget: The Motley Fool’s picks aren’t infallible—past success ≠ future returns.
The trick? Diversify, research, and hold tight.

Bottom Line: Patience Pays

Beaten-down stocks are the thrift-store treasures of investing—ignored by the masses but ripe for the picking. Viking Therapeutics and TransMedics Group fit the bill: strong businesses trading at discounts due to short-term noise. Meanwhile, Stock Advisor’s selections remind us that long-term winners often start as overlooked underdogs.
For investors with a stomach for volatility and a time horizon measured in years, these dips could be the buying opportunity of the decade. After all, the best deals aren’t found in the flashy front window—they’re buried in the markdown bin.