Assessing Pro Medicus’s Valuation After New US Contracts And Visage 7 Product Updates

Simply Wall St.

Mar 14

Pro Medicus (ASX:PME) is back in focus after securing about A$40 million in US contract renewals, including an expanded MedStar Health deal covering cardiology imaging and a higher fee renewal with ...

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However, the 3 year total shareholder return is...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"PME.AU":"PRO MEDICUS LTD","BK7094":"医疗保健技术"},"translate_title":"评估Pro Medicus在美国新合同和Visage 7产品更新后的估值","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"PME.AU":1},"content_text":"Pro Medicus (ASX:PME) is back in focus after securing about A$40 million in US contract renewals, including an expanded MedStar Health deal covering cardiology imaging and a higher fee renewal with Zwanger-Pesiri. See our latest analysis for Pro Medicus. These contract wins and product updates come after a tough share price stretch, with a 30 day share price return of 21.52% decline and a year to date share price return of 40.26% decline. However, the 3 year total shareholder return is 107.87%, suggesting long term holders have still seen substantial gains despite recent pressure. If this news has you looking more broadly across medical technology and digital health, it could be a good time to scan our 10 healthcare AI stocks for other potential ideas to research. With A$133 per share, mixed recent returns and an analyst price target of A$207.76, the real question is whether Pro Medicus is now trading below its true worth or if markets are already pricing in future growth. AdvertisementMost Popular Narrative: 32.4% Undervalued According to the most followed narrative on Pro Medicus, a fair value of A$196.78 versus the last close at A$133 points to meaningful upside the market is not reflecting.  Here is what makes Pro Medicus genuinely exciting as an investment: despite being the #1 rated enterprise imaging product in its category (ranked by KLAS Research, the healthcare IT equivalent of Gartner), it still holds only around 8% of the US market. Of the top 25 US hospital networks, the Integrated Delivery Networks, that collectively represent the most valuable contracts, only four currently run Visage.  Read the complete narrative. Want to understand why this narrative sees so much headroom left? It leans heavily on sustained revenue growth, fat margins and a rich future earnings multiple. The exact mix of those assumptions is where the story gets interesting. Result: Fair Value of A$196.78 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, this hinges on continued contract wins and rich margins; a slowdown in imaging volumes or tougher US hospital budgets could quickly challenge the upbeat fair value story. Find out about the key risks to this Pro Medicus narrative. Another View: High Multiple, Different Message While the user narrative pegs fair value at A$196.78 and calls Pro Medicus undervalued, our earnings based view tells a different story. On a P/E of 59.2x versus peers at about 28x and a fair ratio of 32.5x, the share price bakes in a lot of optimism. For new investors, that raises the question of whether it represents a margin of safety or a significant downside risk. See what the numbers say about this price — find out in our valuation breakdown. ASX:PME P/E Ratio as at Mar 2026Next Steps This mix of optimism and caution sets the tone, so if you care about timing your entry, review the full picture quickly and weigh up the 2 key rewards and 1 important warning sign for yourself. Looking for more investment ideas? If you stop with just one stock, you risk missing other opportunities, so use the screener to quickly spot ideas that better match your risk and return goals.  Zero in on value by checking out our 5 high quality undervalued stocks that filters for companies with quality fundamentals at prices some investors may be overlooking. Prioritise resilience by scanning the 7 resilient stocks with low risk scores to find businesses with lower risk scores that might suit a steadier approach. Get ahead of the crowd with the screener containing 13 high quality undiscovered gems, which focuses on high quality names that are not yet widely followed.   This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.New: Manage All Your Stock Portfolios in One PlaceWe've created the ultimate portfolio companion for stock investors, and it's free.• Connect an unlimited number of Portfolios and see your total in one currency• Be alerted to new Warning Signs or Risks via email or mobile• Track the Fair Value of your stocksTry a Demo Portfolio for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. 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