Alcidion (ASX:ALC) Wins Dual AI Healthcare Approval After Swinging to Profit- Time to Buy or Wait?

Alcidion Clears a Key AI Approval Hurdle

Alcidion Group (ASX: ALC) hit a regulatory milestone that could open up its next phase of growth. The company has secured Class I Software as a Medical Device (SaMD) registration for the AI-powered concept detection feature inside its flagship Miya Precision platform, both in Australia and the United Kingdom. This means Alcidion can now sell this tool as a certified medical product in its two biggest markets. Coming off the back of a maiden net profit in FY25 and a wave of new contract wins, this is a company showing real signs of a turnaround. But is it too early to buy, or is the opportunity already priced in?

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Why Dual SaMD Registration Changes the Commercial Game for Alcidion

Hospitals and health systems are getting stricter about which AI tools they allow into clinical settings. Many now require formal medical device certification before they will even consider adoption. By clearing this hurdle in both Australia and the UK, Alcidion has positioned Miya Precision to compete for contracts that demand certified AI software.

The concept detection feature works by reading a clinician’s written notes, spotting medical terms, and suggesting standardised codes to improve record quality. A clinician still reviews and approves everything, so it acts as a smart assistant rather than making decisions on its own.

What makes this exciting for investors is the upsell opportunity. Miya Precision is already live in more than 400 hospitals across 87 healthcare organisations. Concept detection can now be sold as a certified add-on to those existing customers, which means Alcidion can grow revenue from its current base without the high cost of winning brand-new deals. In a world where AI in healthcare is booming, that kind of built-in advantage matters.

Contract Momentum Builds, But Concentration Risk Looms

Alcidion’s recent numbers tell a strong story. Contracted revenue for FY26 sits at A$43.1 million, up roughly 40% on the same period last year and already above total FY25 revenue. The company has A$14.2 million in cash, no debt, and management has upgraded guidance to EBITDA and operating cash flow at least in line with FY25, with potential upside.

The big wins driving this momentum include an A$12.3 million expansion of the Leidos contract supporting the Australian Defence Force and a preferred supplier selection for University Hospitals Sussex (UHSx), which could be worth at least A$35 million over seven years. If finalised, UHSx would become Alcidion’s largest UK contract to date.

The concern, however, is concentration. A large share of Alcidion’s future revenue depends on a small number of big NHS deals. NHS procurement can be slow and unpredictable. If even one major contract gets delayed, the impact on a company of this size could be meaningful.

The Investor’s Takeaway

At a market cap of around A$140 million, Alcidion is not cheap. The stock trades on a P/E ratio above 90 times, which means investors are paying a premium for expected growth. Bell Potter maintains a buy rating with a price target of A$0.17, while community fair value estimates range between A$0.10 and A$0.15.

We believe the turnaround story is genuine. The combination of certified AI products, growing recurring revenue, and a deepening contract pipeline gives Alcidion a clear path forward. But at current valuations, there is little room for missteps. Growth-focused investors comfortable with small-cap risk may find this an attractive entry point, while more cautious investors might want to wait until the UHSx contract is signed and sealed before committing.