The Pro Medicus Ltd (ASX: PME) share price soared 9% today after winning its largest ever contract.
Pro Medicus describes itself as a leading-edge medical imaging solutions business.
US contract win
The company revealed it has signed an A$330 million, 10-year contract with Trinity Health, one of the largest not-for-profit healthcare systems in the US.
Trinity Health has 93 hospitals, 107 ‘continuing care’ locations, 142 urgent care locations and many other health and well-being services, spanning 26 stores over 127,000 colleagues, including 9,300 employed physicians and clinicians, as well as 29,000 affiliated physicians and clinicians.
The Visage 7 Enterprise Imaging Platform, including the Visage 7 Open Archive and Visage 7 Workflow modules, will be implemented throughout Trinity to provide a unified diagnostic imaging platform.
Pro Medicus said Visage will complete the migration from Trinity Health’s legacy PACS system, comprising nine vendors, to Visage 7 Open Archive. Visage 7 will also provide enterprise distribution of images integrated to Trinity Health’s electronic health record (EHR).
Multi-phased go-lives are targeted to begin in the early part of the third quarter of the 2025 calendar year.
Management commentary
The Pro Medicus CEO Dr Sam Hupert said:
Trinity Health is our largest customer to date and the first with a national footprint. Our initiative with Trinity Health is noteworthy for its’ scope and scale which will see the Visage 7 platform used by over 650 radiologists and thousands of clinicians who will benefit from the proven differentiation of Visage 7.
Our pipeline remains strong and spans all market segments. As has been the case with many of our recent contracts, this deal is for our “full-stack” comprising all three core Visage products, a trend we see continuing.
Final thoughts on the Pro Medicus share price
Pro Medicus continues to win impressive, large contracts with huge clients in the US. If it keeps winning contracts like this, it will rapidly grow its market share in the world’s biggest economy.
The company could eventually become the ASX’s largest technology business at this rate. I’m impressed. Is this a good time to buy? That’s a question I’ve been too conservative about for a long time. But it’s now priced on a higher price/earnings (P/E) ratio than ever. However, its profit could soar in the coming years with all of the previously-announced contracts and boosted by its huge (and rising) profit margins.
It’s probably the best business on the ASX, but it is also one of the most expensive as well.