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Pro Medicus (ASX:PME) share price on watch after signing 5 contracts worth $45 million

The Pro Medicus Ltd (ASX: PME) share price is under the spotlight after revealing more contract wins.

Pro Medicus provides a full range of medical imaging software and services to hospitals, imaging centres and healthcare groups. It offers end-to-end healthcare imaging across RIS, PACS, AI and e-health solutions.

Ongoing contract wins

Pro Medicus revealed it has won five new contracts with a combined minimum value of A$45 million. Those customers are from a range of segments of the healthcare market. All the contracts will be fully cloud deployed and are expected to be completed within six months.

It announced:

A $6.5 million, five-year contract with Nicklaus Childrens Hospital, a leading paediatric hospital in Miami, Florida.

An $8.5 million, five-year contract with US Radiology Specialists, a partnership of physician-owned radiology practices.

A $9 million, eight-year contract with Moffitt Cancer Center in Tampa, Florida.

A $9.5 million, five-year contract with Consulting Radiology, a private radiology group in Minnesota.

A $11.5 million, seven-year contract with Nationwide Children’s Hospital, a leading paediatric hospital in Columbus, Ohio.

Pro Medicus pointed out that these additional contracts bring the company’s minimum total contract value for new sales this financial year to $245 million.

Management commentary

The Pro Medicus CEO, Dr Sam Hupert, said:

They are a diverse group, two children’s hospitals, two physician led private radiology groups and a cancer center. This reinforces our belief that our product is ideally suited to virtually all segments of the market from smaller groups all the way through to some of the largest IDN’s and academic medical centers in the US.

Despite record new contract signings this year, our pipeline remains strong with a broad range of opportunities both in terms of size and market segments.

Final thoughts on the Pro Medicus share price

The Pro Medicus share price has risen 3% in early response to this news. It is trading on an enormous price/earnings ratio (p/e) ratio – well in excess of 100. But, it is winning a lot of new contracts and that comes with a very high profit margin.

Is it a buy? If it keeps delivering contract wins like this, then it could be. I have been too pessimistic before about how far the Pro Medicus share price could rise in the shorter-term. However, there are certainly cheaper ASX growth shares out there which could be wiser picks for now.

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