The Pro Medicus Ltd (ASX: PME) share price has jumped 6% after the ASX healthcare share announced two large contract wins.
Pro Medicus provides a full range of medical imaging software and services to hospitals, imaging centres and healthcare groups worldwide.
UCHealth contract win
The company announced it has signed a A$170 million, 10-year contract with UCHealth. This is one of the company’s largest ever contracts.
UCHealth spans a network of 14 hospitals, with affiliate hospitals, clinic locations and healthcare providers extending throughout Colorado, Wyoming and western Nebraska.
Pro Medicus says that due to UCHealth’s unique combination of academic-based and community-focused medicine, brings “leading-edge care to patients throughout the Rocky Mountain region”, which includes the University of Colorado Hospital.
Planning for the rollout is to start immediately, with a go-live target for the second quarter of the 2026 calendar year.
Pro Medicus noted that UCHealth has also opted for the cardiology offering, which will “provide UCHealth with a truly unified enterprise imaging solution”, which the company thinks the trend will continue as more healthcare enterprises look to consolidate their separate imaging systems.
Management revealed the pipeline “remains strong and spans all market segments”.
Franciscan Missionaries of Our Lady Health System contract win
The company announced in a separate ASX announcement that it has agreed a five-year contract renewal with a minimum value of A$20 million.
The contract renewal is for the Visage 7 viewer and the new contract is for the Visage 7 Open Archive. Pleasingly, the renewal for Visage 7 Viewer was negotiated at an increased per-transaction fee.
Pro Medicus’ management said this deal confirmed its belief there is a material opportunity for the company to sell its Open Archive offering to its existing base of ‘viewer only’ clients.
Final thoughts on the Pro Medicus share price
The business is clearly doing well, the dollar value of the wins is good by itself. It bodes well that the cardiology offering is gaining traction, as well as the potential for upselling existing viewer only clients.
Does today’s valuation make sense? It depends on how much the company can continue winning new contracts to justify the high expectations. It continues to be successful and I’m glad I’m a shareholder for the long-term. I’m not looking to buy more shares today though.
But, there are likely other ASX growth shares that could be better value buys right now.
