The Pro Medicus Ltd (ASX: PME) share price is under the spotlight after the ASX healthcare share announced another big win in the US.
Pro Medicus describes itself as a leading informatics company, providing a full range of medical imaging software and services to hospitals, imaging centres and healthcare groups globally.
Latest contract win
Pro Medicus announced it has signed a 7-year contract worth A$40 million with LucidHealth, a leading provider of radiology services in the US.
The ASX healthcare technology company will help provide a unified diagnostic imaging platform.
Planning for the rollout begins immediately, with a phased go-live targeted at start at the end of the September 2025 quarter or in the December 2025 quarter.
LucidHealth employs more than 300 radiologists across the network of 140 care sites. It provides ‘subspecialised’ remote and onsite radiology reading services, as well as having its own clinically integrated network of radiology practices.
Management commentary
The Pro Medicus CEO Dr Sam Hupert said:
LucidHealth joins our rapidly growing list of private practice clients. Their needs, which include subspecialized onsite and remote reading. teleradiology capabilities, are uniquely catered for by our proprietary server-side streaming technology reinforcing our view that Visage 7 is ideally positioned to address this market and the other key market segments we service, which include academic medical centers, IDNs and outpatient clinics.
LucidHealth joins the increasing number of Visage 7 North American clients to opt for Visage CloudPACS, our cloud-based solution, which is fast becoming the standard in the North American healthcare IT market.
Final thoughts on the Pro Medicus share price
The business is clearly trading on a vast price/earnings ratio (p/e ratio). The question is whether the business will be able to justify the valuation in the coming years. With the way it’s growing profit margins and winning new contracts, the outlook is promising.
However, I don’t think I’d buy it just on today’s contract win, I’d need to have conviction in the long-term success of the business. Time will tell if today is a good price or not.
For now, there are other ASX growth shares that could be better buys.
