Why The Pro Medicus (PME) Share Price Rocketed 16% Yesterday
Pro Medicus is a Melbourne-based software owner and developer that licenses products to large US hospitals and Australian radiology clinics. The company has offices in Richmond (Victoria), Berlin and the United States.
What Did Pro Medicus Report?
The health imaging company reported that its revenue grew an impressive 47.9% to $50.1 million. In Australia, revenue increased 30.2%, North American revenue grew by 2.2% and European revenue jumped 102.3% higher.
Pro Medicus reported that its net profit after tax (NPAT) increased 91.9% to $19.1 million, while underlying net profit rose by 83.1% – this excludes currency gains and the new accounting standards.
The company also revealed that its EBIT margin increased to 51.6%.
During the year, Pro Medicus signed three large contract wins.
First, 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 Balance Sheet & Dividend
Pro Medicus remains debt free and its cash has increased by 28% to $32.3 million.
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, which represents an increase of 75%.
Is Now The Time To Buy Pro Medicus Shares?
Pro Medicus ticks a lot of boxes: debt free, growing cash balance, high (and growing) profit margins, sticky revenue, growing dividends, a long growth runway and seemingly (one of) the best products in the industry.
If I could go back in time, I’d definitely buy shares. However, 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.
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Disclaimer: Any information contained in this article is limited to general financial information only. The information should NOT be considered as financial advice of ANY kind. The information should not be acted on because it may not be correct and it has not taken into account your specific needs, goals or objectives. Please, consider consulting a licenced and trusted financial adviser before acting on the information. By reading this website, you acknowledge this warning and agree to our terms & conditions available here. This article is authorised by Owen Raszkiewicz of The Rask Group Pty Ltd.
At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.
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