The Pro Medicus Ltd (ASX: PME) share price is being supported today by the University of Vermont Health Network win worth $14 million.
Why is the Pro Medicus share price in focus?
Pro Medicus has announced that it has won a 8-year contract with the University of Vermont Health Network Inc worth $14 million.
Its Visage technology will replace multiple legacy picture archiving and communication system (PACS). Visage 7 will be deployed in the public cloud.
Based on a transactional licensing model, the contract will see its software implemented across UVM’s six hospitals, providing a consistent diagnostic imaging platform across the network. The UVM Medical Center in Vermont is the teaching hospital for the Larner College of Medicine.
Planning for the rollout has commenced immediately, with initial go-lives targeted for the second half of the calendar year.
Management comments
Pro Medicus CEO Dr Sam Hupert said: “We continue to build momentum in the market with this, our seventh contract in a row, adding to other recent major announcements. UVM Health Network is the fourth of these to opt for a cloud-based solution, a trend we see increasing rapidly amongst healthcare systems in North America.
“Our pipeline continues to grow. Visage 7 with its proven cloud-native capability provides us with a significant strategic advantage that enables us to address these opportunities across a growing segment of the market both in North America and other regions.”
Summary thoughts on the Pro Medicus share price
The fact that Pro Medicus is winning so many contracts is a great sign because it means clients (and potential clients) view its offering as much more superior than other competitors.
This new revenue is being added with the Pro Medicus EBIT margin (EBIT explained) being comfortably north of 50%. That means a lot of these contracts will add to the profit, balance sheet strength and dividends of the business.
If Pro Medicus can keep winning clients and improving its product then the company could become the clear leader in the US over time.
It’s one of the best ASX growth shares around, I’m just not sure what the right price to buy it is. Potential rising interest rates makes it harder to judge.
