The Pro Medicus Limited (ASX: PME) share price is currently at a record high. Can the Pro Medicus share price continue to break records like Usain Bolt?
Pro Medicus develops and supplies healthcare imaging software and services to hospitals, diagnostic imaging groups and other health-related entities.
PME share price
Pro Medicus flexes optionality
In Pro Medicus’ most recent announcement, its US subsidiary, Visage Imaging Inc. signed a multi-year research collaboration agreement with Mayo Clinic.
Since this announcement on 3 June, the Pro Medicus share price has jumped by around 30%.
Why is the market feeling more optimistic after this announcement?
Well, Pro Medicus’ competitive advantage lies in the superior quality and efficiency of its Visage 7 software platform.
The collaboration agreement aims to facilitate the development and commercialisation in the field of Artificial Intelligence (AI) using the Visage 7 platform. Lots of technical words right?
In other words, Pro Medicus is trying to optimise its Visage 7 platform by adding functionalities that enables clinicians to use AI to produce better patient outcomes.
Pro Medicus wants to build the best possible platform with the help of feedback from the Mayo Clinic.
Are there more records to be broken?
There is a lot of optimism built into the Pro Medicus share price and there are valid reasons to feel this way.
Pro Medicus has built a leading software product that produces high margins, is highly scalable and there are high switching costs.
These are some characteristics that we are fond of at Rask.
At record multiples, I think it’s best to understand what reinvestment opportunities lie ahead in the future. If these opportunities offer high rates of return, then it may be a worthwhile investment.
Given AI technology is still in its infancy, I think there are still plenty of reinvestment opportunities ahead.
If you’re on the hunt for ASX growth shares, I’d recommend signing up for a free Rask account to gain access to our stock reports.
