Pro Medicus Limited (ASX: PME)Share Price and News
About Pro Medicus (ASX:PME)
Pro Medicus is an Australian business specialising in medical imaging technology. Founded and based in Melbourne, Victoria, in 1983, its Visage 7 software enables hospitals and diagnostic imaging providers to efficiently manage and interpret large volumes of medical images.
The platform is known for its speed, scalability, and native cloud architecture. The company has a strong presence in North America and is expanding its activities in Europe and other international markets. Its SaaS business model delivers high-margins and recurring revenue.
These factors have meant the company has not had to raise capital and its share price has kept expanding and expanding as it continues to roll out into the US. Moreover, The company’s software requires minimum capex to be installed or training for clients to use.
Pro Medicus Company History
The company was founded in Melbourne in 1983 by Dr Sam Hupert and Anthony Hall. Having recently graduated from medical school, the pair saw potential for the use of computers in medicine, even when computers were more complicated.
Initially, it gained a foothold in healthcare IT through medical practice management software and later through helping patients receive diagnostic results faster. In 2000 it listed and managed to survive the dot com burst. It expanded overseas, including into North America through a deal with Agfa.
In 2009, the company bought Visage Imaging, a German and U.S.-based imaging software firm that was then owned by Mercury Systems. It paid just US$3.5m.
Following the acquisition, the company launched Visage 7, which became central to its product offerings and positioned Pro Medicus as a leader in medical imaging. Since then, client numbers have increased through long-term contracts with major health networks and leading academic hospitals in the US.
2014 was a key year when it unveiled a six-year deal worth $20m with a large US health network. The deals have kept flowing since then, but that first one was major because PME won out of nearly 30 companies (including majors like GE, Phillips and Siemens). The rest is history.
In FY24, Pro Medicus generated $161.5m in revenue and an $82.8m profit, representing a near 50% margin. Its biggest deal in that year was a 10-year US$140m deal with Baylor Scott & White.
Future Outlook of Pro Medicus (ASX: PME)
Pro Medicus is well-positioned amid an ever-growing market. Despite having A$624m in contracts over 5 years assuming current contracts up for renewal are renewed, the company claims it has only penetrated 7% of the market and that it is growing by 3.5% per year.
Moreover, it claims that it could benefit from adopting AI in its software, and expanding it to other health services using medical imaging, such as cardiology.
The key risks are competition, key personnel risk and macroeconomic risks. That said, as advances in medical imaging continue, the data required keeps expanding. For example, an optoacoustic breast ultrasound can take up more than 10 GB of computer storage. This means downloading images, and in turn viewing them, can take a while and waiting reduces radiologists’ productivity. And in a post-COVID world, with even doctors now working from home, you don’t want you images just sitting on one computer in an office somewhere.
Is PME a Good Stock to Buy?
Pro Medicus has consistently delivered strong returns, making it one of the most closely watched technology stocks on the ASX. Its financial performance is supported by long-term contracts, high margins, and a recurring revenue model tied to imaging volumes from some of the top hospitals globally.
That said, its valuation is demanding, trading at a high price-to-earnings multiple relative to the broader market. This suggests the market has priced in a significant portion of future growth. Investors should weigh this premium against the company’s strong fundamentals, debt-free balance sheet, and impressive growth pipeline.
For growth-focused investors comfortable with tech-sector volatility, PME remains a quality business with strong fundamentals and global appeal.
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Frequently Asked Questions
Pro Medicus provides advanced radiology imaging software through its flagship Visage 7 platform, used by hospitals and diagnostic groups to manage and analyse medical images.