The Pro Medicus Ltd (ASX: PME) share price is up again after the ASX healthcare tech share revealed another impressive contract win in the US.
Latest US contract win
Pro Medicus has revealed it just signed an 8-year, $12 million contract with Samaritan Health Services, an Oregon based community organisation.
It has five hospitals in the mid-Willamette Valley and central Oregon coast.
As usual, it’s based on a transactional licensing model which will see Visage 7 implemented throughout Samaritan providing a “unified diagnostic imaging platform across the network.” It will replace legacy picture archiving and communication systems (PACS).
Planning for the rollout is to start immediately, with the initial go-live targeted for the second half of 2023.
Management commentary
The leader of Pro Medicus, CEO Dr Sam Hupert, said:
Samaritan joins our growing list of IDN clients and will reinforce our strong presence in the Northwest region of the United States.
IDNs are the largest market segment in North America, and this is our fifth material IDN contract in the last 12 months.
This deal represents another “full-stack” Visage 7 solution comprising all three Visage products namely viewer, workflow and archive, and builds on our increasing momentum in the IDN space. It also reinforces our view that our platform is equally suited to mid-sized IDNs as it is to the larger ones, enabling us to address multiple segments of this important market.
IDN stands integrated delivery network.
What to make of this for the Pro Medicus share price
It’s clearly doing well. The company is winning contract after contract, which is locking in long-term revenue growth, at a very high profit margin. Pro Medicus is doing exactly what it needs to for long-term success.
The problem is what price should investors pay for the business? The profit forecast on CMC puts the Pro Medicus share price at over 120 times the projected profit for the 2023 financial year. That does seem pricey, even if it’s one of the best on the ASX.
There are other ASX growth shares that I’d rather invest in at more understandable value.
