The Pro Medicus Limited (ASX: PME) share price has gone nuts, it’s up over 13% in response to the release of its FY19 report.
Pro Medicus is a Melbourne-based software owner and developer, licensing products to large US hospitals and Australian radiology clinics. The company has offices in Richmond, Victoria, Berlin, Germany and in the United States.
Pro Medicus’ Impressive FY19 Growth
The health imaging company reported that its revenue jumped by 47.9% to $50.1 million. In Australia revenue grew by 30.2%, North American revenue increased by 42.2% and European revenue jumped 102.3% higher.
Pro Medicus reported that its net profit after tax (NPAT) increased by 91.9% to $19.1 million whilst its underlying net profit rose by 83.1% – this excludes currency gains and the new accounting standards.
The health technology business also revealed that its EBIT margin (click here to learn what EBIT means) increased to 51.6%.
During the year Pro Medicus signed three large contract wins.
There was a $27 million contract with Partners Healthcare for the Massachusetts General Hospital and Brigham and Women’s Hospitals.
The second win was a $3 million plus extension to the contract it has with a large German Government Hospital network.
The third win was a $14 million contract with Duke Health, the largest health system in North Carolina.
Due to all of the progress and investor excitement, Pro Medicus joined the S&P/ASX 200 index this year.
Pro Medicus Dividend and Balance Sheet
The Pro Medicus Board decided to declare a final dividend of 4.5 cents per share, bringing the total year dividend to 10.5 cents per share – an increase of 75%.
Pro Medicus remains debt free and its cash has increased by 28% to $32.3 million.
Pro Medicus Management Comments
Pro Medicus CEO Dr Sam Hupert said: “Our North American pipeline continues to be strong both in terms of quantity and quality of prospects. It is a dynamic market and we feel we are in a good position with our technology and proven ability to implement.
“We are also seeing a greater impact from the network effect of our growing base of Tier 1 academic clients which we believe will provide us with a strategic advantage in the emerging fields of Enterprise Imaging and Artificial Intelligence.”
Is The Pro Medicus Share Price A Buy?
Pro Medicus ticks a lot of boxes. Debt free, growing cash balance, high profit margins (and growing), rewarding shareholders with growing dividends, a long growth runway, sticky revenue and seemingly (one of) the best products in the industry.
If I could go back in time I’d definitely buy shares. But, at 163 times this year’s earnings, it is certainly priced for a lot of future success. It would have been better to buy a month ago at $25, or earlier this year, or better yet when it was under $1 five years ago!
We may be presented with a bigger valuation to buy shares, so it might be better to wait rather than buying in at all costs. The rapidly growing shares in the free report below could be better bets to beat the market.
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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).
At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.