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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Legal disclaimer: Chances are, the information you read on the BESTETFS website may contain a mix of factual information and general financial advice. Any information/advice on this website is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information and NEVER INVEST IN AN ETF OR MANAGED FUND BEFORE READING THE PRODUCT DISCLOSURE STATEMENT (PDS). If you don't read the PDS you're practically flying blind with one arm tied behind your back. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).
At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.
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