The Pro Medicus Ltd (ASX: PME) share price soared approximately 5% after announcing a new contract win.
It fell 3% on Monday in response to the global worries about the tariff trade war, so it is only up around 2% this week after the volatility caused by the tariff uncertainty.
New US contract win
Pro Medicus reported that it has signed a contract for seven years with BayCare, which was described by the ASX healthcare share as the “leading health care system in the Tampa Bay and central Florida regions of the US.”
This contract is based on a transactional licensing model, as per usual, which will see the company’s Visage 7 Enterprise Imaging Platform, including Visage 7 Viewer and Visage 7 Workflow modules, implemented throughout BayCare providing a unified diagnostic imaging platform.
Pro Medicus said the planning for the rollout will start straight away. The go-live target is for either late in the third quarter, or in the fourth quarter, of the 2025 calendar year.
The ASX healthcare share highlighted that BayCare’s graduate medical education programs are expanding to help ensure West Central Florida and BayCare “continue to attract the best physicians.” By mid-2025, BayCare will be operating 18 programs with 283 residents and has committed to expand to 650 residents by 2029.
BayCare has more than 800 employed physicians, with more than 32,000 team members.
I think one of the best benefits of this is that it embeds the Pro Medicus software with a large number of medical professionals. This could help entrench and grow its market position.
Management commentary
The Pro Medicus CEO Dr Sam Hupert said:
BayCare joins our rapidly growing list of integrated delivery network (IDN) clients. They also join the 70% of all Visage 7 North American clients to opt for a cloud-based solution, which, as a result of our CloudPACS strategy, is becoming the standard in the North American healthcare IT market.
Final thoughts on the Pro Medicus share price
Pro Medicus is arguably the best business on the ASX, but it has a valuation to match. In the past five years, the Pro Medicus share price has risen by close to 1,000%. However, its profit hasn’t risen as much, causing the price/earnings ratio (p/e ratio) to climb higher and higher. It’s very difficult to say if it’s risky to buy at this valuation because I would have also said it’s expensive at a lower price.
It’s probably wise to look at other ASX growth shares that aren’t priced quite so highly.
