4DMedical (ASX:4DX) What the Market Is Really Pricing In at A$5.40

What Retail Investors Need to Know Before Chasing the Story

4DMedical has quickly become one of the more talked about stocks in the market, and with that attention comes the need for clarity.

In this piece, we want to break down the company’s latest investor presentation and what it really means for shareholders. That includes a closer look at the underlying technology, how the business is positioned today, and what the longer term journey could look like from here. The aim is simple: to help retail investors clearly understand what 4DMedical does and why the market is paying attention.

With 4DX recently trading around A$5.40, it is also worth stepping back and asking a more important question. What is the market consensus actually saying about the company at this price?

By looking at the valuation being implied by the current share price, we can better understand what expectations are already priced in, how optimistic investors appear to be about future growth, and what that means for anyone considering the stock today.

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The Commercial Levers That Matter From Here

In the investor letter, 4DMedical positions its CT VQ scan as the first non contrast, CT based ventilation and perfusion imaging product. In simple terms, this technology provides a clearer view of how oxygen and airflow move through the lungs, alongside how blood travels through the lung vessels. That combination is critical for diagnosing and managing a range of pulmonary conditions.

In the US alone, this opportunity is meaningful. More than 1 million VQ scans are performed each year, and 4DMedical highlights that its software is compatible with approximately 14,500 existing CT scanners. This is an important advantage. Rather than requiring hospitals to invest in new hardware, the company can integrate its software directly into scanners already in place, significantly lowering adoption friction and shortening sales cycles.

The letter also introduces one of the most important elements of the commercial roadmap: reimbursement. This matters because reimbursement is often the key gating factor that determines whether radiology software can scale beyond early adoption. Without reimbursement, even strong technology struggles to achieve widespread clinical use.

On that front, the expanded relationship with Philips is notable. The partnership now covers CT VQ across North America and includes a minimum order commitment expected to materialise over CY26 to CY27.

What Needs to Go Right After the Raise

Alongside this, the company completed a A$150 million capital raise through Bell Potter using a combined structure.

This included A$79.1 million raised through the issue of new shares, alongside A$70.9 million via a block trade of existing shares. Those shares had previously been issued to Alpha Investment Partners as collateral. Importantly, the company stated that dilution from the new equity component was limited to 3.86%, with the placement priced at A$3.80 per share.
Management has indicated that the funds will be directed primarily toward accelerating US commercialisation, including investment across sales, marketing, and integration workflows, while also strengthening balance sheet flexibility.

What a 458x Revenue Multiple Is Really Saying

When we bring all of this together, the company appears well positioned to execute on its commercialisation strategy and scale the business over time. The technology is validated, the balance sheet has been strengthened, and the pathway into the US market is clearly defined.

However, when we turn to the share price, the expectations become much clearer. With 4DMedical trading around A$5.40, FY25 revenue of A$5.9 million, and an enterprise value of approximately A$2.7 billion, the stock is valued on an EV to revenue multiple of roughly 458x.

At this level, the market is making a very strong statement. To justify a multiple of this magnitude, investors are effectively pricing in extraordinary top line growth over the coming years. This is not a case of steady progress or incremental improvement. The valuation reflects a belief in explosive, multi year revenue expansion, supported by near perfect execution across commercial rollout, adoption, and scaling.

It is important to acknowledge that valuation multiples on their own never tell the full story. They do not capture technology quality, clinical impact, or strategic positioning. That said, they are highly useful in understanding market expectations.

Understanding the Bet Investors Are Making at This Price

If we step back and treat this as simple, back-of-the-envelope maths, the numbers are telling us a very clear story about what the market is implicitly underwriting.

Let’s start with a generous outcome.

If the company eventually trades on a 20x EV to revenue multiple, which is high but not unreasonable for a proven, category-leading medical imaging software business such as Pro Medicus a market comparable to what “4DX could be”, today’s A$2.7 billion enterprise value would require future revenue of roughly A$135 million.

Starting from around A$6 million of FY25 revenue, that implies more than 20x revenue growth over a six year period. In practical terms, that equates to roughly a 66% compound annual growth rate, sustained every year for six consecutive years.

If we take a more conservative terminal multiple of 15x EV to revenue, the hurdle moves even higher. To support the same A$2.7 billion valuation, revenue would need to reach approximately A$180 million. That is close to a 30x increase from current levels, implying an annual growth rate closer to 80% over the same timeframe.

So what are these assumptions really telling us?

First, the market is not pricing in gradual success. It is pricing in near flawless execution. These growth rates assume rapid and consistent commercial uptake, with very limited delays across sales cycles, reimbursement, clinical adoption, and workflow integration.
Second, there is an assumption that the technology becomes deeply embedded. To sustain 60% to 80% growth for this long, the product must move beyond early adopters and become a standard part of clinical practice across a large number of sites quickly.