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Pro Medicus Limited (AU:PME)
ASX:PME

Pro Medicus Limited (PME) AI Stock Analysis

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AU

Pro Medicus Limited

(Sydney:PME)

Rating:81Outperform
Price Target:
AU$327.00
▲(17.74%Upside)
Pro Medicus Limited scores highly due to its robust financial performance and positive earnings call, indicating strong growth potential. Despite high valuation concerns, the company's significant contract wins and technological advancements support a positive outlook. The overbought technical condition is a secondary consideration, suggesting caution in the short term.
Positive Factors
Market Acceptance
Over 55% of surveyed US hospital executives are likely to deploy Pro Medicus's Visage 7 software, highlighting strong market acceptance and growth potential.
Product Innovation
The Visage 7 software from Pro Medicus creates significant value for customers, making it 60-70% faster than legacy solutions and boosting customer volumes significantly.
Negative Factors
Market Penetration
PME's share of the US market remains low at 7%, which highlights the opportunity ahead, notwithstanding upside prospects from the core TAM, adjacencies and potential new markets.

Pro Medicus Limited (PME) vs. iShares MSCI Australia ETF (EWA)

Pro Medicus Limited Business Overview & Revenue Model

Company DescriptionPro Medicus Limited engages in the development and supply of healthcare imaging software and services to hospitals, diagnostic imaging groups, and other related health entities in Australia, North America, and Europe. The company offers radiology information systems (RIS), a proprietary medical software for practice management, training, installation, professional services, and after-sale support and service products; and Promedicus.net, an e-health platform. It also provides healthcare imaging software that provides radiologists and clinicians with visualization capability for viewing 2-D, 3-D, and 4-D medical images, as well as picture archive and communication system (PACS)/digital imaging software; and integration products. In addition, the company offers Visage Ease Pro, a mobile application that provides users the ability to interpret various diagnostic imaging studies stored on a Visage 7 server. The company provides its products under the Visage RIS, Visage RIS/PACS, Visage 7, Visage Ease Pro, and Visage Ease names. Pro Medicus Limited was incorporated in 1983 and is headquartered in Richmond, Australia.
How the Company Makes MoneyPro Medicus Limited generates revenue through the sale and licensing of its Visage Imaging software solutions to healthcare institutions, including hospitals, imaging centers, and radiology practices. The company offers its products through subscription-based models and long-term contracts, providing recurring revenue streams. Additionally, Pro Medicus earns income from professional services, including software implementation, training, and support. Key partnerships with prominent healthcare organizations and hospitals contribute to its revenue, allowing for expansion into new markets and enhancing its reputation in the medical imaging technology industry.

Pro Medicus Limited Earnings Call Summary

Earnings Call Date:Feb 12, 2025
(Q2-2025)
|
% Change Since: -3.58%|
Next Earnings Date:Aug 13, 2025
Earnings Call Sentiment Positive
The earnings call reflects a generally positive outlook, with record financial results and significant contract wins highlighting growth. However, challenges such as the radiologist workforce shortage and pricing pressure from competitors present ongoing hurdles.
Q2-2025 Updates
Positive Updates
Record Financial Performance
Pro Medicus achieved a record first half with revenue up 31.1%, profit after tax up 42.7%, and EBIT margins increasing to 71.9%. Cash and investments grew by 17.7%, and a record half-year dividend was paid out, up 38.9%.
Significant Contract Wins
Major contracts include a $330 million 10-year deal with Trinity, an $8 million renewal with Mercy over 8 years, and a $32 million 5-year renewal with a large risk client in Australia.
Strong Pipeline and New Contracts
New contract wins include U Kentucky and BayCare in Florida. The forward revenue has jumped to $894 million over 5 years, with potential upside from existing contracts.
Technological Advancements and AI Progress
Pro Medicus continues to advance in cloud technology and AI, with the first implementation of cardiology products scheduled for April. Their Visage 7 platform is well-suited for AI integration.
Negative Updates
Radiologist Workforce Shortage
The global shortage of radiologists is acute, affecting the ability of healthcare providers to cover workloads.
Market Competition and Pricing Pressure
Despite technological advantages, Pro Medicus faces competition and pricing pressure, with some potential clients choosing cheaper alternatives.
Company Guidance
During the recent call, Pro Medicus announced several key metrics showcasing a strong performance in the first half of FY25. The company reported a 31.1% increase in revenue, with profit after tax rising by 42.7%. EBIT margins improved from the high 60s to 71.9%. Their cash and other investments grew by 17.7% over six months, and they paid out a record half-year dividend, up 38.9%. Pro Medicus remains debt-free and has a forward revenue forecast of $894 million over five years. The company successfully implemented major projects with Baylor Scott & White and OHSU and secured significant contracts, including a $330 million deal with Trinity over 10 years and an $8 million renewal with Mercy. Additionally, the U.S. market now contributes approximately 90% of their revenue, driven by the Visage 7 product.

Pro Medicus Limited Financial Statement Overview

Summary
Pro Medicus Limited exhibits robust financial performance with strong revenue growth and high profitability margins. The balance sheet is stable with minimal debt and strong equity backing, and cash flow management is excellent, indicating financial stability and potential for sustained growth.
Income Statement
90
Very Positive
Pro Medicus Limited has demonstrated strong revenue growth with a Revenue Growth Rate of 29.3% in the latest annual report. The company maintains high profitability with a Gross Profit Margin of 75.7% and a Net Profit Margin of 51.3%. Additionally, the EBIT Margin and EBITDA Margin are robust at 69.5% and 74.7% respectively, highlighting efficient operations. These metrics indicate a strong income statement performance.
Balance Sheet
85
Very Positive
The balance sheet reflects solid financial health, evidenced by a low Debt-to-Equity Ratio of 0.01, indicating minimal leverage. The Return on Equity (ROE) is impressive at 44.1%, underscoring effective management. The Equity Ratio is a strong 72.9%, suggesting a high proportion of assets financed by equity. Overall, the balance sheet is stable with strong equity backing.
Cash Flow
88
Very Positive
The cash flow statement is strong, with a Free Cash Flow Growth Rate of 37.3%, indicating significant cash generation capability. The Operating Cash Flow to Net Income Ratio is 1.05, and the Free Cash Flow to Net Income Ratio is 0.97, demonstrating excellent cash conversion. These metrics reflect strong cash flow management.
BreakdownTTMJun 2024Jun 2023Jun 2022Jun 2021Jun 2020
Income Statement
Total Revenue184.58M161.43M124.90M93.46M67.88M56.82M
Gross Profit144.39M122.24M92.36M92.94M46.66M56.42M
EBITDA146.87M120.69M91.69M69.64M49.53M37.70M
Net Income98.29M82.79M60.65M44.44M30.85M23.08M
Balance Sheet
Total Assets294.18M257.43M202.13M157.05M125.57M95.64M
Cash, Cash Equivalents and Short-Term Investments182.33M154.89M121.50M90.55M61.82M43.41M
Total Debt1.83M2.07M1.85M2.28M2.62M2.28M
Total Liabilities71.93M69.70M63.36M55.32M43.89M35.46M
Stockholders Equity222.25M187.73M138.78M101.73M81.68M60.18M
Cash Flow
Free Cash Flow104.47M80.08M58.33M53.20M31.33M23.72M
Operating Cash Flow107.89M86.78M64.77M62.23M39.02M31.59M
Investing Cash Flow-80.26M-78.07M-9.79M-17.56M-27.40M-7.87M
Financing Cash Flow-45.04M-39.84M-27.53M-23.31M-14.05M-12.31M

Pro Medicus Limited Technical Analysis

Technical Analysis Sentiment
Positive
Last Price277.73
Price Trends
50DMA
258.61
Positive
100DMA
252.50
Positive
200DMA
235.70
Positive
Market Momentum
MACD
3.65
Positive
RSI
55.60
Neutral
STOCH
70.97
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:PME, the sentiment is Positive. The current price of 277.73 is below the 20-day moving average (MA) of 277.88, above the 50-day MA of 258.61, and above the 200-day MA of 235.70, indicating a neutral trend. The MACD of 3.65 indicates Positive momentum. The RSI at 55.60 is Neutral, neither overbought nor oversold. The STOCH value of 70.97 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:PME.

Pro Medicus Limited Peers Comparison

Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
AUPME
81
Outperform
$28.94B294.4152.66%0.18%29.87%40.97%
51
Neutral
$7.41B0.32-61.11%2.34%16.99%1.69%
$54.57M-9.88%
AURHT
62
Neutral
AU$17.01M140.00-3.11%89.13%69.57%
AUALC
55
Neutral
AU$141.01M-5.63%-11.96%7.50%
AUPCK
55
Neutral
AU$62.63M-457.46%21.93%10.34%
AUMDR
53
Neutral
AU$48.73M110.00-8.34%-5.27%50.29%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AU:PME
Pro Medicus Limited
277.73
142.39
105.21%
TDMMF
Mach7 Technologies
0.24
-0.12
-33.33%
AU:RHT
Resonance Health Ltd
0.04
-0.02
-33.33%
AU:MDR
MedAdvisor Limited
0.08
-0.40
-83.33%
AU:ALC
Alcidion Group Limited
0.11
0.06
120.00%
AU:PCK
PainChek Ltd
0.03
0.00
0.00%

Pro Medicus Limited Corporate Events

Pro Medicus Secures $20M Contract with University of Iowa Health Care
May 8, 2025

Pro Medicus Limited has secured a AUD $20 million, 5-year contract with University of Iowa Health Care to implement its Visage 7 Enterprise Imaging Platform across the institution. This agreement will replace the legacy PACS system with a cloud-based solution, enhancing diagnostic imaging and integrating with electronic health records. The rollout is set to begin immediately, with completion targeted for Q4 2025, marking a significant step in Pro Medicus’s expansion in the healthcare IT sector.

Pro Medicus Partners with UCSF for AI Research Collaboration
Apr 15, 2025

Pro Medicus Limited announced a multi-year research collaboration agreement with UCSF to leverage the Visage AI Accelerator platform for AI research and development aimed at product commercialization. This collaboration aligns with Pro Medicus’s strategy to integrate AI into healthcare imaging, potentially leading to innovative solutions that improve patient outcomes and strengthen the company’s position in the imaging IT industry.

Pro Medicus Limited Announces Cessation of Securities
Apr 7, 2025

Pro Medicus Limited has announced the cessation of 2,610 ordinary fully paid securities through an on-market buy-back, effective April 4, 2025. This move is part of the company’s capital management strategy and may impact its share structure, potentially enhancing shareholder value and optimizing its financial operations.

Pro Medicus Limited Updates on Share Buy-Back Program
Apr 7, 2025

Pro Medicus Limited has announced an update regarding its ongoing on-market buy-back program. As of April 7, 2025, the company has repurchased a total of 7,648 ordinary fully paid securities, including 2,610 bought back on the previous day. This buy-back initiative is part of Pro Medicus’s strategy to manage its capital structure and potentially enhance shareholder value.

Pro Medicus Limited Announces Cessation of Securities
Apr 2, 2025

Pro Medicus Limited announced the cessation of 2,518 ordinary fully paid securities following an on-market buy-back, effective April 2, 2025. This move is part of the company’s capital management strategy, potentially impacting its share structure and market perception positively by demonstrating financial strength and shareholder value commitment.

Pro Medicus Limited Updates on Market Buy-Back Program
Apr 2, 2025

Pro Medicus Limited has announced an update on its ongoing on-market buy-back program, revealing the acquisition of 2,518 ordinary fully paid securities on the previous day, adding to a total of 2,520 securities bought back prior. This buy-back initiative is part of the company’s strategy to manage its capital structure and potentially enhance shareholder value, reflecting a proactive approach in maintaining its market positioning.

Pro Medicus Limited Announces Cessation of Securities
Apr 1, 2025

Pro Medicus Limited announced the cessation of 2,520 ordinary fully paid securities as part of an on-market buy-back, effective April 1, 2025. This move is part of the company’s capital management strategy, potentially impacting its stock liquidity and shareholder value positively by reducing the number of shares outstanding.

Pro Medicus Limited Initiates Daily Share Buy-Back
Apr 1, 2025

Pro Medicus Limited has announced a daily buy-back of its ordinary fully paid securities, with 2,520 shares bought back on the previous day. This move is part of an ongoing strategy to manage the company’s capital structure, potentially enhancing shareholder value and signaling confidence in the company’s financial health.

Pro Medicus Limited Announces On-Market Share Buy-Back
Mar 31, 2025

Pro Medicus Limited has announced an on-market buy-back of its ordinary fully paid shares, indicating a strategic move to optimize its capital structure and potentially enhance shareholder value. This buy-back may reflect the company’s confidence in its financial health and future prospects, and could positively influence its market positioning and stakeholder interests.

Pro Medicus Limited Updates on Market Buy-Back Program
Mar 31, 2025

Pro Medicus Limited has announced an update regarding its ongoing on-market buy-back program. The company has repurchased a total of 27,076 ordinary fully paid securities before the previous day and an additional 1,250 securities on the previous day. This buy-back initiative is part of the company’s strategy to optimize its capital structure and potentially enhance shareholder value.

Pro Medicus Limited Announces Cessation of Securities
Mar 30, 2025

Pro Medicus Limited announced the cessation of 1,220 ordinary fully paid securities due to an on-market buy-back, effective March 28, 2025. This move is part of the company’s capital management strategy, potentially impacting its financial structure and shareholder value by reducing the number of outstanding shares.

Pro Medicus Limited Updates on Daily Buy-Back Program
Mar 30, 2025

Pro Medicus Limited has announced a daily update on its ongoing on-market buy-back program. As of March 31, 2025, the company has repurchased a total of 25,856 ordinary fully paid securities, with an additional 1,220 securities bought back on the previous day. This buy-back initiative reflects Pro Medicus Limited’s strategic approach to managing its capital structure and potentially enhancing shareholder value.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jun 05, 2025