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Fund Manager Summary on Pro Medicus Ltd (ASX:PME)
In February 2026, Ausbil Investment Management commented that Pro Medicus Ltd (ASX:PME) was a buy at current levels, citing very high margins (around 80% EBITDA), a long contract runway and that AI-related sentiment weakness provided a practical entry point. Fund managers overall view PME as a high-quality, cloud-native leader in enterprise medical imaging with a large addressable US market and sustained contract momentum — recent commentary and actions place more weight on the buy-side views expressed in early 2026 following the share-price re-rating — highlighted by multi-year wins and renewals including a 10-year, $330 million Trinity Health agreement, a A$170 million 10-year UCHealth deal and A$20 million contracts such as University of Iowa and others, plus an ATO for the US Veterans Affairs cloud program; these factors support structural tailwinds (cloud-native architecture, expansion into cardiology and digital pathology, recurring high-margin revenue streams and AI distribution optionality) and pricing power evidenced by renewals at higher prices, while risks remain around a historically rich valuation, execution and timing of large contract rollouts, and market-driven volatility that can amplify downside if growth expectations slip; actionable considerations are to monitor contract pipeline conversion, renewal pricing, rollout timing of landmark contracts and AI integration adoption, balancing the durable competitive advantages and long-term growth optionality against execution and valuation risk.
Commentary From The Managers
There are 40 insights from 19 fund managers regarding their investment in Pro Medicus Ltd (ASX:PME) available on Thesis Tracker.
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Commentary From The Managers
ELM Responsible Investments
12 Mar 2026
$133.55
Summary
- ELM Responsible Investments continues to hold Pro Medicus Ltd because strong first-half results and a robust contract pipeline justify maintaining conviction through short-term price volatility.
- Pro Medicus reported strong revenue and NPAT growth underpinned by additional large contract wins.
- The manager does not view sharp price reactions to results as fundamental deterioration, but rather as market overreaction in high-multiple stocks.
- ELM maintains high conviction in the long-term earnings trajectory and structural growth of the radiology imaging software business.
First Sentier Investors
26 Feb 2026
$127.60
Summary
- First Sentier Investors believes Pro Medicus remains well positioned and continues to hold because its long‑term contract pipeline, recurring revenue model and dominant market position underpin durable cashflows and valuation resilience.
- Strong recent operating momentum: revenue growth ~28% and EPS growth ~30% year‑on‑year, demonstrating robust underlying performance.
- Minor earnings miss vs. consensus: results were a couple of percentage points shy of analysts' forecasts, driven primarily by timing differences rather than structural weakness.
- Trinity Health contract key to near‑term variability: the largest ever contract (10‑year, $330m) is being rolled out; slight shifts in start timing (weeks or a quarter) explain the shortfall and do not change the long‑term economics.
- Valuation insensitive to small timing differences: push‑outs of a month or a quarter in begin date have negligible impact on the intrinsic value of the business.
- Investment thesis drivers: scalable software platform, high margins, recurring revenue from long‑dated contracts, and execution on large rollouts that can meaningfully accelerate future revenue.
- Risks monitored: execution risk on large implementations, concentration of revenue from major contracts, and timing variability that can create short‑term volatility in reported results.
- Conclusion: maintain conviction in the company’s structural growth story and execution capability despite near‑term timing noise from the Trinity rollout.
Ausbil Investment Management
26 Feb 2026
$127.60
Summary
- Ausbil Investment Management believes Pro Medicus is a uniquely high‑quality imaging software company and continues to hold because it delivers exceptional profitability (around 80% EBITDA margins), durable contract economics and a long growth runway.
- Uniqueness and scalability: the platform is highly differentiated, scalable across geographies and modalities, and hard for competitors to replicate.
- Outstanding profitability: very high margins (~80% EBITDA) drive strong cash generation and operating leverage.
- Long runway from contract wins: ongoing new contract wins underpin growth, with expanding global adoption.
- Durable revenue from renewals: contract renewals are now almost the same size as new contract wins, supporting recurring revenue and retention.
- Valuation context: multiples have historically been elevated and have come back a little, leaving a premium but not at previous extremes.
- Market dislocation — AI fears: short‑term concerns around AI have driven some weakness, which Ausbil views as a temporary dislocation and an entry point.
- Conviction: at these levels Ausbil describes it as "a terrific business" and considers it a buy.
Solaris Investment Management
31 Jan 2026
$178.15
Summary
- Solaris Investment Management believes Pro Medicus remains a high‑quality, structurally advantaged healthcare imaging software company, and continues to hold because the recent weakness reflects a broad technology and growth sell‑off rather than company‑specific deterioration.
- January underperformance: the share price fell amid a wider technology and growth company sell‑off; there was no company‑specific news driving the move.
- Operational execution: the business is continuing to execute, consistently securing new contracts for its healthcare imaging software platform.
- Business model: platform‑based contracts support recurring revenue, deep customer relationships and a scalable delivery model.
- Competitive position: specialist imaging software and ongoing contract wins reinforce its niche market leadership and implementation expertise.
- Outlook: Solaris views the long‑term structural tailwinds from digitalisation of medical imaging as intact, with current market volatility creating a divergence between short‑term share price moves and underlying operational momentum.
Firetrail Investments
30 Jan 2026
$184.12
Summary
- Firetrail Investments believes Pro Medicus is a high-quality, market-leading radiology software business and continues to hold because durable recurring revenue, strong margins and global traction are balanced by a valuation that is roughly at our DCF and offers less upside versus other tech opportunities.
- Product and market leadership: Best‑in‑class imaging platform (Visage) with deep clinical integrations and strong reputation in radiology.
- Recurring, high‑quality revenue: Long‑term contracts and SaaS pricing drive predictable revenue and high gross margins, supporting cash generation and reinvestment.
- Commercial momentum: Frequent contract announcements (historically at least biweekly at peak), steady pipeline and accelerating US and global adoption.
- Competitive advantages: High switching costs, clinical workflow embedment and data scale that create durable barriers to entry.
- Valuation positioning: Share price is roughly in line with our DCF today; relative to other opportunities in software/tech, expected upside is more constrained, so we prefer to hold rather than add materially.
- Key risks: Execution risk on large deals, potential competitive pressure, regulatory/healthcare spending changes and sensitivity to valuation multiples.
Wilson Asset Management
30 Jan 2026
$184.12
Summary
- Wilson Asset Management believes Pro Medicus is one of the highest‑quality stocks on the ASX and initiated a position because the current valuation can, for the first time in a long while, be justified on a DCF basis, presenting an attractive risk/reward opportunity.
- Category leader: Pro Medicus is an absolute category killer in radiology with a dominant, specialised software platform.
- Exceptional unit economics: ~95% gross margins and ~70% profit margins drive strong cash generation and high return on invested capital.
- Durable moat: Scalable SaaS model, high switching costs, entrenched customer relationships and regulatory integration create significant barriers to competition.
- AI risk assessed: While AI poses long‑term industry change, regulatory complexity in healthcare and radiology dampens near‑term disruption and supports Pro Medicus’s position as an integrator rather than a displacer.
- Valuation evolution: Valuation was the primary concern historically; recent share price levels make a DCF‑based entry defensible, turning a former constraint into an opportunity.
- Growth runway: Strong recurring revenue, international expansion, product upsell potential and continued adoption of digital diagnostics underpin scalable growth.
- Key risks: Execution risk, potential regulatory shifts, and longer‑term technology disruption remain monitoring priorities despite the company’s current strengths.
LHC Capital
31 Dec 2025
$220.87
Summary
- LHC Capital believes Pro Medicus remains a core long‑term holding and continues to hold because the business is now operationally stronger, strategically positioned for AI‑led growth and trading at a more reasonable valuation.
- Share price vs performance: shares fell ~11.5% over the year despite another excellent year of business execution, ongoing contract wins and strong operational results.
- Product leadership: Visage 7 is increasing its presence as the product of choice across academic medical centres, large Integrated Delivery Networks, corporate radiology groups and smaller regional providers.
- Competitive moat: competitors have made no meaningful progress in closing the gap; Visage 7 has extended its lead over peers.
- AI platform thesis: the diagnostic imaging viewer will become the natural platform for AI‑enabled diagnostic tools—AI sits on top of the viewer rather than replacing it.
- Workflow embedding: with Visage 7 deeply embedded in clinical workflows, Pro Medicus is uniquely positioned to capture value as AI adoption accelerates across medical imaging.
- Stronger fundamentals: market share has increased, the addressable market has expanded and the strategic importance of the viewer has become clearer compared with a year ago.
- Valuation opportunity: the share price decline has created a more reasonable valuation relative to the company’s superior competitive and strategic position, presenting an attractive setup ahead.
- Long‑term optionality: an unassailable product, expanding market opportunity and significant long‑term optionality make Pro Medicus one of the highest quality businesses in the Fund.
Infinity Asset Management
31 Oct 2025
$263.61
Summary
- Infinity Asset Management continues to hold an overweight position in Pro Medicus Ltd.
- The stock declined 14.5% in October, primarily due to sentiment-driven factors reflecting a broader pullback in the technology sector.
- Despite the decline, PME’s Visage Imaging division secured a significant five-year, A$10m enterprise PACS contract with University Hospital Heidelberg and associated institutions.
- This contract will replace and consolidate three legacy PACS systems, enhancing PME’s presence in Germany and Europe.
- Infinity maintains its conviction as PME shows strong momentum through contract wins with large hospital networks in the U.S. and specialist radiology clinics.
- The company’s performance is supported by its best-in-class radiology imaging platform and a robust long-term growth outlook.
Ten Cap
31 Oct 2025
$263.61
Summary
- Pro Medicus (PME) share price declined by 14.5% as the market shifted focus towards cheaper sectors.
- Despite the decline, Pro Medicus continues to demonstrate strong fundamentals.
- Ten Cap remains confident in the company's long-term growth trajectory.
- The investment thesis is underpinned by the company's consistent performance.
Oracle Advisory Group
30 Sept 2025
$308.29
Summary
- Oracle Advisory Group update: revised investment thesis on Pro Medicus Ltd (PME)
- Valuation view: Shares in PME are already pricing in significant future growth and are trading on a very rich valuation
- Portfolio action: Oracle Advisory Group took some profits and trimmed the position by 0.5%
- Risk management: the trim reflects caution around the stretched valuation and an effort to modestly de‑risk the holding
- Monitoring: the fund manager will continue to watch growth, earnings and valuation metrics and may revisit position sizing as new information emerges
- Disclaimer: this summary reflects Oracle Advisory Group's update and is for informational purposes only and not financial advice
Selector Funds Management
30 Sept 2025
$308.29
Summary
- Selector Funds Management continues to hold its position in Pro Medicus (ASX:PME) due to recent developments in the U.S. market.
- In September, Pro Medicus announced that its U.S. subsidiary, Visage Imaging, received an Authority to Operate (ATO) for the Veterans Affairs Enterprise Cloud (VAEC).
- The ATO approval, highlighted by CEO Sam Hupert, signifies a significant milestone for Pro Medicus, marking years of preparation.
- This approval allows Pro Medicus to transition its existing implementation of Visage 7 to the VAEC.
- Completion of this migration is expected to serve as a reference site for other Veterans’ Integrated Service Networks (VISNs) considering cloud migration.
- Pro Medicus currently holds a market capitalisation of $32 billion.
Glennon Small Companies
12 Sept 2025
$298.45
Summary
- Pro Medicus delivered a record full-year result for FY25.
- Revenue from ordinary activities rose to AUD $213.0 million, an increase of 31.9% over FY24.
- Net profit after tax reached AUD $115.2 million, up 39.2%.
- The company remains debt-free, ending the year with cash and financial assets of AUD $210.7 million, up 35.5%.
- Operationally, the year was marked by strong contract wins, renewals, and upgrades.
- Secured seven new contracts with a minimum total value of AUD $520 million.
- Two major renewals totalling AUD $130 million were achieved.
- Sales of additional modules added another AUD $39 million.
- The final fully-franked dividend was raised to 30 cents per share.
- Continued benefits from increased adoption of its cloud-based Visage 7 platform and cloud-native solutions, particularly in North America.
- Glennon Small Companies continues to hold because of a robust pipeline of future opportunities.
Ten Cap
31 Aug 2025
$298.96
Summary
- Ten Cap continues to hold Pro Medicus (PME) due to its solid results.
- Strong and expanding pipeline into new product areas supports growth potential.
- Despite the positive fundamental outlook, PME experienced relative underperformance in the market.
- The current performance does not fully reflect the growth opportunities ahead for PME.
Hyperion Asset Management
31 Aug 2025
$298.96
Summary
- Pro Medicus Ltd. (PME) reported a strong FY25 result with Group revenue increasing by 31.9% and EBIT by 45%.
- Plans to release a natively-developed digital pathology product this calendar year, following the successful launch of its cardiology product in FY25.
- PME has a modern, cloud-based enterprise imaging product suite that includes modules for radiology, cardiology, and digital pathology.
- The company is well-placed to continue taking share of the U.S. hospital market, currently holding approximately 10% of the addressable market under contract as of FY25.
- CEO confirmed a strong pipeline with new opportunities across all key market segments including Academic Medical Centres, Integrated Delivery Networks (IDNs), and the private market.
- Hyperion Asset Management continues to hold PME due to its robust growth prospects and strategic positioning in the healthcare technology sector.
Ten Cap
14 Aug 2025
$315.69
Summary
- Ten Cap highlights Pro Medicus as the highest quality company on the ASX.
- Jun Bei Liu remains bullish on Pro Medicus, confident in significant upside potential.
- The company’s cloud-native advantage positions it ahead of competitors who struggle with hybrid systems.
- Pro Medicus demonstrates predictable earnings and substantial growth potential in a large addressable market.
- Recent results showed solid performance with slight outperformance against expectations.
- The upcoming launch of their digital pathology platform is expected to enhance market reach and share.
- Pro Medicus has captured 10% of the US market and continues to pursue growth across various verticals.
- Current target price suggests a 30% increase from the current share price, with potential for further upside.
- The company’s products are being adopted by many AI companies, positioning it as a potential standard in imaging.
- Investors should be aware of the risks associated with growth companies, including volatility and the need to meet growth targets.
- Despite some stocks being expensive, Ten Cap believes Pro Medicus justifies its valuation due to its growth prospects.
- Market conditions may lead to rotation from large caps to smaller companies, presenting opportunities for strong outperformance.
Antares Capital
30 June 2025
$285.08
Summary
- Antares Capital took advantage of the recent decline in PME share price to initiate a new position.
- PME is viewed as having very high barriers to entry in the medical software industry.
- The company is capable of commanding high margins, which are currently expanding.
- There is growing acceptance of PME's radiology and cardiology streaming platform in the US market.
Oracle Advisory Group
30 June 2025
$285.08
Summary
- Oracle Advisory Group updates their investment thesis on Pro Medicus Ltd.
- Pro Medicus secured a 10-year contract with UC Health worth A$170m.
- Additionally, a 5-year contract renewal and a new Visage 7 Open Archive contract with Franciscan Missionaries of Our Lady Health Systems was signed, valued at A$20m.
- This follows a 5-year A$20m contract from University of Iowa Health Care.
- Contract momentum remains strong for Pro Medicus, showcasing their robust market position.
- Oracle Advisory Group continues to hold due to this ongoing contract success.
First Sentier Investors
30 June 2025
$285.08
Summary
- Pro Medicus lifted by 42.7% in the June quarter, significantly outperforming the broader market.
- Announced a multi-year research collaboration with the University of California San Francisco (UCSF) to enhance Visage AI capabilities.
- This partnership highlights PME’s strong product development efforts and reinforces its leadership in cloud and technology solutions.
- Secured a $20 million, five-year fullstack contract with the University of Iowa, validating its reputation for delivering scalable, best-in-class technology.
- These developments strengthen PME’s industry-leading position, pricing power, and capability to drive sustained revenue growth.
- Continued market penetration and contract renewals with existing clients support First Sentier Investors' positive outlook on Pro Medicus.
Lakehouse Capital
30 June 2025
$285.08
Summary
- Pro Medicus delivered another strong year, reinforcing its leadership in radiology imaging.
- Utilizes best-in-class cloud-enabled technology for disciplined execution and premium product offerings.
- Exceptional financial performance with 26% average revenue growth and 31% average earnings growth over the past five years.
- Achieved impressive 53% net profit margins in the most recent half year.
- Secured a landmark A$170 million, 10-year contract with UCHealth, showcasing expanding capabilities.
- The contract's inclusion of cardiology signifies evolution into a comprehensive enterprise imaging platform.
- Large platform in the world’s largest healthcare market poised for AI-algorithm distribution.
- Shift toward longer 10-year contracts indicates deepening customer loyalty and long-term confidence.
- Lakehouse Capital has held Pro Medicus since inception, trimming the position as it became one of the highest quality businesses on the ASX.
- Heavily reduced position during the year due to market pricing reflecting many years of expected growth.
- Continues to manage position size in light of elevated market price, adhering to the mantra of ‘let winners run’.
Ten Cap
31 May 2025
$281.87
Summary
- Ten Cap has updated their investment thesis on Pro Medicus (PME) following recent developments.
- PME has rallied sharply due to new contract wins, enhancing confidence in its long-term growth prospects.
- At the Macquarie conference, PME provided encouraging insights regarding its performance.
- The company has maintained a 100% contract renewal rate, with all renewals occurring at higher prices.
- Ten Cap continues to hold PME as they view these developments positively.
Kardinia Capital
31 May 2025
$281.87
Summary
- Pro Medicus rose 23% for the month.
- Significant news: 5-year $20m contract with University of Iowa Health Care.
- Founder-led company.
- High recurring revenue.
- Strong returns and excellent balance sheet.
- Company does not screen as cheap.
- Long runway of growth ahead.
Glennon Small Companies
31 May 2025
$281.87
Summary
- Pro Medicus delivered a strong return as investor confidence rebounded after earlier weaknesses.
- The company benefits from structural tailwinds in diagnostic imaging.
- There is expanding adoption of its Visage imaging platform in the U.S. and key international markets.
- Positive developments in its contract pipeline are noted.
- High-margin revenue streams have supported upward revisions to earnings expectations.
- Glennon Small Companies continues to hold because of these favorable trends.
Ausbil Investment Management
30 Apr 2025
$229.41
Summary
- Pro Medicus (PME) returned +7.4% for the month.
- Stock reached fresh all-time highs.
- Positive sentiment driven by multiple broker reports and new broker initiation.
- Ausbil remains comfortable with their investment thesis.
- Potential for larger contract wins noted.
- Opportunities identified within the US military health system as medium-term upside.
Selector Funds Management
31 Mar 2025
$199.79
Summary
- Selector Funds Management continues to hold a positive outlook on Pro Medicus Ltd.
- Pro Medicus signed a $40m, 7-year contract with LucidHealth, a significant private radiology practice.
- LucidHealth employs over 300 Radiologists across more than 140 sites.
- This contract reflects Pro Medicus’ expansion into the North American private market.
- CEO Dr Sam Hupert emphasized that the company’s cloud-based solution is becoming a standard in North American healthcare IT.
- The rollout of services is set to begin immediately, with a phased go-live aimed for late in the second half of calendar year 2025.
- Pro Medicus currently has a market capitalisation of $21b.
Ten Cap
31 Mar 2025
$199.79
Summary
- Pro Medicus (PME) experienced a retracement in March due to broader equity market de-risking and recalibrated earnings expectations from sell-side analysts.
- Ten Cap maintains a high level of conviction in PME’s fundamentals.
- Positive feedback from recent channel checks indicates continued demand for the Visage RIS platform.
- Despite valuation concerns, PME’s Rule of 40 metric stands at an exceptional 104%, surpassing domestic technology peers.
Ten Cap
21 Mar 2025
$223.58
Summary
- A fast-growing business with a large global addressable market
- Ten Cap continues to hold PME due to its long-term value potential
- PME has been labelled "too expensive" but continues to defy sceptics
- Jun Bei Liu emphasizes the enormous addressable market still to be tapped
- Despite a recent ~20% drop from its high, the investment thesis remains intact
Selector Funds Management
31 Dec 2024
$250.12
Summary
- Pro Medicus announced a $30m, seven-year deal with Duly Health and Care, the largest independent multi-specialty physician medical group in the Midwest USA.
- The deal supports over 40 radiologists, 1,000 physicians, and 150 outpatient clinics.
- Implementation of the full stack Visage platform via the cloud is targeted for the second quarter of calendar year 2025.
- CEO Dr. Sam Hupert emphasized the importance of Duly Health and Care as they operate in the private radiology/outpatient space, which is showing increased opportunities.
- Duly Health and Care joins a growing list of Visage 7 clients opting for a fully cloud-engineered solution, aligning with Pro Medicus' CloudPACS strategy.
- Later in the month, Pro Medicus announced a $15m, five-year expansion deal with Duke University Health System for the Visage Open Archive module.
- This expansion will transition Duke’s on-premise Visage 7 Viewer to the cloud and extend the contract to the end of 2029.
- Pro Medicus currently has a market capitalisation of $26b.
Yarra Capital Management
31 Dec 2024
$250.12
Summary
- Yarra Capital Management continues to hold an underweight position in Pro Medicus (PME)
- Pro Medicus outperformed the period due to multiple contract wins
- Yarra Capital Management views PME as a highly attractive global leader
- Current high valuation metrics are believed to fully reflect PME's status
- Future earnings growth risks are potentially constrained by high market share levels
- Concerns about cost reinvestment affecting profitability
Hyperion Asset Management
31 Dec 2024
$250.12
Summary
- Hyperion Asset Management continues to hold Pro Medicus due to recent contract wins.
- Pro Medicus signed a A$30m, 7-year ‘full stack’ cloud-based contract with Duly Health and Care.
- DHC is the largest independent medical group in the Midwest USA, supporting over 40 radiologists and 1,000 physicians.
- The ‘full stack’ deal includes Visage 7 Viewer, Open Archive, and Workflow.
- Rollout for the DHC contract is set to commence immediately, with a go-live planned for Q2 2025.
- Pro Medicus also secured a A$15m, 5-year Visage Archive contract with Duke University Health.
- The Duke deal extends an existing contract by an additional 2 years, more than doubling their contract size.
- The new Duke contract will migrate Visage 7 Viewer to the cloud while implementing Open Archive.
- Pro Medicus sees a material opportunity to sell Visage 7 Open Archive to existing “Viewer-only” clients.
Oracle Advisory Group
31 Dec 2024
$250.12
Summary
- Oracle Advisory Group continues to hold a positive outlook on Pro Medicus (PME).
- Pro Medicus achieved a remarkable 162.2% return in 2024.
- Over the past 5 years, PME has delivered an extraordinary 1052.1% return.
- The company has traded at over one hundred times earnings for much of this time.
- Recent contracts for the Visage Imaging system have driven significant growth.
- The A$330m contract from Trinity Health marks PME's largest and first pan-US healthcare contract.
- This achievement distinguishes PME as a leader in replacing legacy PACS systems.
ELM Responsible Investments
31 Dec 2024
$250.12
Summary
- Pro Medicus is an Australian Healthcare IT company focused on Enterprise Imaging and Radiology Information System (RIS) software.
- The company offers two main products: Visage RIS and Visage 7, which are cloud-based SaaS solutions for large enterprise clients.
- Currently, 85% of revenue comes from the USA, indicating a strong focus on this market.
- In FY 2024, Pro Medicus reported a 29.3% year-over-year revenue growth to $161.5 million.
- Revenue from North America grew by 34.4%, while Australia saw a 5.9% increase.
- The underlying EBIT margin expanded to 69.5%, contributing to a 35.3% increase in underlying profit before tax to $116.5 million.
- A significant driver of growth is a 10-year, $330 million contract with Trinity Health, implementing the Visage 7 platform.
- Pro Medicus continues to innovate, with Visage 7 now supporting a wide range of diagnostic modalities and non-DICOM images.
- The company has made a strategic investment in Ellucid, enhancing its cardiology imaging offerings.
- Looking to 2025, Pro Medicus is positioned for further growth with a robust pipeline across various market segments.
Yarra Capital Management
30 Nov 2024
$248.83
Summary
- Pro Medicus (PME, underweight) – the health imaging company experienced strong outperformance due to multiple contract wins.
- PME is recognized as a highly attractive global leader in the health imaging sector.
- Yarra Capital Management believes the current valuation metrics fully reflect the company's market position.
- There are risks to future earnings growth, primarily due to high levels of market share.
- Cost reinvestment may also constrain PME's potential for growth moving forward.
Hyperion Asset Management
30 Nov 2024
$248.83
Summary
- Hyperion Asset Management continues to hold a positive outlook on Pro Medicus Limited.
- Pro Medicus announced a significant $330m, 10-year cloud-based contract with Trinity Health.
- Trinity Health is one of the largest non-for-profit health systems in the U.S., with 93 hospitals and over 127,000 employees.
- This contract marks Pro Medicus' largest customer to date and the first with a national footprint.
- The contract includes a full stack solution featuring Visage 7 Viewer, Visage 7 Open Archive, and Visage 7 Workflow.
- Visage will replace nine legacy PACS across the Trinity Health network.
- Implementation will occur in multi-staged go-lives, starting in early third quarter of 2025.
Selector Funds Management
30 Nov 2024
$248.83
Summary
- Selector Funds Management continues to hold its position in Pro Medicus Ltd.
- Pro Medicus announced a significant contract win in November, valued at $330 million over ten years with Trinity Health.
- The contract includes the full software offering from Pro Medicus and will replace multiple legacy providers.
- Trinity Health is one of the largest not-for-profit health care systems in the U.S., operating 93 hospitals across 26 states with over 127,000 employees.
- The rollout of the new system is set to begin immediately, with go-lives anticipated from the third quarter of calendar year 2025.
- Pro Medicus currently has a market capitalisation of $24.2 billion.
Oracle Advisory Group
30 Sept 2024
$178.25
Summary
- Oracle Advisory Group continues to hold Pro Medicus (PME) reflecting confidence in its growth potential.
- PME exhibits stellar results and has only a 7% market penetration in the US, indicating significant opportunity ahead.
- Concerns exist regarding how long this growth will last and whether current valuations are justified.
- Current stock price at $177 contrasts sharply with Morningstar's $37 fair value.
- Analysts like JP Morgan foresee a potential doubling of market share to about 15% for a revised $130 fair value.
- There is skepticism about best-in-class platforms like Visage 7 being utilized solely in academic and large healthcare institutions, which could limit PME's revenue growth.
- Recent contracts in FY24 total about $250m, with one major deal contributing $140m.
- PME has primarily focused on radiology revenues, needing successful expansion into Cardiology and AI for sustained growth.
- Cardiology revenue is anticipated to begin in FY25, even though currently there are no clients in this area.
- The Cardiology market could represent 25-35% of the radiology market's size.
- Revenues from AI integration in Cardiology workflows are expected to be realized at a later stage.
- The pipeline remains strong, and management indicates potential for large contracts similar to the recent deal with Baylor, Scott and White.
ELM Responsible Investments
30 June 2024
$135.66
Summary
- Pro Medicus is an Australian Healthcare IT company specializing in Enterprise Imaging and Radiology Information System (RIS) software.
- Their products, Visage RIS and Visage 7, offer cloud-based SaaS solutions for large enterprise clients, enhancing productivity and efficiency in radiology departments.
- The USA is now their main market, accounting for approximately 85% of revenues.
- PME has shown a strong financial track record, with a 118% increase in stock price for FY 23/24.
- PME is the largest holding in the ELMRI ANZ Conviction Fund.
- Contracts with clients like Memorial Sloan Kettering and Baylor Scott & White Health are structured for 7-10 years with a transaction-based model, ensuring revenue growth.
- The company has industry-leading profitability and cash conversion, supported by a long-term mindset from co-founders.
- PME has significant growth potential due to low market penetration rates (approximately 10% in the U.S.) and superior product performance.
- Investments in AI-integrations and other medical specializations, such as a USD$5m investment in Elucid, highlight potential avenues for medium-term revenue growth.
Yarra Capital Management
30 June 2024
$135.66
Summary
- Yarra Capital Management notes Pro Medicus (PME) is a health imaging company that has recently announced five new contracts.
- The new contracts have a combined minimum contract value of $45 million.
- Pro Medicus is recognized as a highly attractive global leader in its field.
- However, Yarra Capital Management believes the current high valuation metrics may have already captured this attractiveness.
- There is a perception of risk that future earnings growth may be constrained due to current high levels of market share.
- Additionally, ongoing cost reinvestment may impact profitability.
Oracle Advisory Group
30 June 2024
$135.66
Summary
- Oracle Advisory Group has previously held PME in their Emerging Companies Portfolio.
- With PME's transition into the ASX 100, the fund manager has initiated a position in the Australian Equities Portfolio.
- PME specializes in medical imaging technology, primarily targeting hospitals in the US.
- The key product, Visage 7, is a cloud-based imaging solution specifically for Radiology.
- Earnings are considered highly defensive due to the contracted income stream.
- There is significant growth potential as market penetration remains at an early stage.
- The stock price has risen as Pro Medicus secured multiple new contracts.
- Recently, five new customer contracts were announced, with a combined minimum value of A$45m.
- New clients include a mix of two children’s hospitals, two private radiology groups, and a cancer centre.
- These contracts are transaction-based, offering further upside potential from volume usage.
Lakehouse Capital
30 June 2024
$135.66
Summary
- Pro Medicus delivered another strong year contributing 5.9% of the Fund’s return.
- Signed a record $245 million in minimum total contract value (TCV) for the year.
- Included a $140 million 10-year deal with Baylor Scott & White Health, the largest in the company’s history.
- This compares favorably to the $104 million in minimum TCV signed last fiscal year.
- Most contracts were for the full stack of Visage 7 products, showing strong traction and larger contract sizes.
- All contracts are to be implemented in the cloud, which has seen increased demand due to recent trends.
- Pro Medicus is debt-free and highly profitable, with two-thirds of incremental revenue translating to pre-tax profit.
- Net cash balance has exceeded $130 million, providing options for new product development and M&A.
- The business has a strong competitive position and a growing product offering.
- Less than 8% penetrated in its core North American market, indicating significant growth potential.
- Lakehouse Capital has held Pro Medicus since inception, recognizing it as one of the highest quality businesses on the ASX.
- Continues to manage position size in light of elevated market price, balancing with the strategy to ‘let winners run’.
Selector Funds Management
31 Mar 2024
$105.00
Summary
- Pro Medicus is a global provider of enterprise imaging software, serving nine of the top 20 U.S. hospitals.
- The company has been founder-led since its establishment in 1983 and employs 115 people across the U.S., Germany, and Australia.
- In its half year 2024 results, Pro Medicus reported four contract wins in North America, totaling over $200m in contract value.
- This includes a $140m contract with Baylor Scott & White Health, the largest not-for-profit health system in Texas.
- All contract wins will be implemented in the cloud and utilize the company's full stack solutions: Viewer, Archive, and Worklist products.
- Pro Medicus is expanding its client base beyond academic hospitals, focusing on Integrated Delivery Networks (IDNs), the largest market segment in the U.S.
- The company has achieved six contract wins in the IDN space over the last 18 months, all cloud-based and involving multiple Visage products.
- Pro Medicus offers the best in market solutions due to superior image streaming capabilities, enhancing speed, functionality, and scalability.
- The software has demonstrated up to a 50% improvement in radiologist efficiency, supported by clinical outcomes.
- The company holds approximately 7% market share in the U.S. by scan volume, with increasing file sizes challenging legacy solutions.
- Pro Medicus is committed to investing in its business to enhance its offerings and maintain a competitive edge.
- The highly recurring nature of its contracts provides greater visibility over multiple years.
- The company is also advancing into adjacent fields with a Cardiology viewer, nearing commercialization and showcased at the RSNA conference in 2023.
- Pro Medicus has a five-year forward revenue projection of over $600m based on current contracts.
- Management is confident in the sales pipeline and expects stronger sales in the second half of the year.
- The company currently has a market capitalization of $10.8b.
Maple-Brown Abbott
30 Jan 2024
$101.17
Summary
- Maple-Brown Abbott identifies Pro Medicus (PME) as a strong investment based on its solid medium-term earnings prospects.
- PME is recognized as a world-class radiology imaging software business.
- The fund manager reports an acceleration in contract award momentum for PME in the US, indicating potential 30-40% earnings growth annually over the coming years.
- PME's share price has appreciated from $55 to $96 per share, driven by its quality business model and a clear path for continued earnings growth.
- The recent contract with Baylor Scott & White Health, valued at $140m over ten years, marks a significant milestone for PME.
- Feedback from industry experts suggests PME has only begun to penetrate the US integrated delivery network (IDN) of hospitals.
- Competitor contract values, such as Sectra’s $227m contract, indicate potential future contract wins for PME.
- PME's advancements into cardiology and AI could expand its addressable market by 40% and lead to higher margins.
- The anticipated reimbursement for AI algorithms in radiology exams is expected to accelerate PME’s AI development faster than market expectations.
- Maple-Brown Abbott’s investment thesis for PME is centered on increased earnings certainty and growth, independent of bond yield fluctuations.
The completeness, accuracy or current status of the investments referenced are not guaranteed.
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Frequently Asked Questions
Who is investing in Pro Medicus Ltd (ASX:PME)?
Fund managers including Ausbil Investment Management, Oracle Advisory Group, Maple-Brown Abbott, Yarra Capital Management, Ten Cap, ELM Responsible Investments, Kardinia Capital, Antares Capital, First Sentier Investors, Hyperion Asset Management, Lakehouse Capital, Selector Funds Management, Glennon Small Companies, Infinity Asset Management, LHC Capital, Wilson Asset Management, Firetrail Investments and Solaris Investment Management have invested in Pro Medicus Ltd (ASX:PME).
Why do fund managers invest in Pro Medicus Ltd?
Fund managers invest in Pro Medicus Ltd due to its strong growth potential in the healthcare IT sector, driven by its leading Visage imaging platform. The company's robust contract pipeline, including multi-year agreements with major healthcare providers, underpins its revenue stability and expansion in the U.S. market. With a high Rule of 40 metric and significant profit margins, Pro Medicus demonstrates both strong fundamentals and scalability. Despite high valuations, the predictable earnings and continued demand for its services make it an attractive long-term investment.
What happened to Pro Medicus Ltd (ASX:PME)?
Fund managers express strong confidence in Pro Medicus Ltd due to its exceptional financial performance, highlighted by a 31.9% revenue increase to AUD $213 million and a 39.2% rise in net profit to AUD $115.2 million for FY25. The company remains debt-free, with cash and assets of AUD $210.7 million. Pro Medicus secured significant contracts with a minimum total value of AUD $520 million, affirming its growing market presence, particularly in the U.S. and Europe. Despite recent share price declines largely driven by market sentiment, the company’s robust fundamentals and strategic positioning in the healthcare sector bolster long-term growth potential. Fund managers underscore the strong adoption of its Visage 7 platform as a key growth driver.
What is the short interest in Pro Medicus Ltd (ASX:PME)?
The short interest in Pro Medicus Ltd (ASX:PME) is 1.35% which makes it the 184th most shorted stock on the ASX. Of the 104.5M shares that Pro Medicus Ltd has on issue, 1.4M have been sold short.
What does Pro Medicus Ltd (ASX:PME) do?
Pro Medicus Ltd. engages in the development and supply of healthcare imaging software, Radiology Information System (RIS), and services to hospitals. It operates through the following geographical segments: Australia, Europe, and North America. The firm’s products include Visage 7 and Visage RIS. The company was founded by Sam Aaron Hupert and Anthony Barry Hall in 1983 and is headquartered in Richmond, Australia.
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