Small-cap healthcare and technology business Pro Medicus Limited (ASX: PME) saw its shares surge 5.5% today after announcing a $3 million five-year contract with a German hospital operator.
Founder led with overseas exposure and the tailwinds of being a digital healthcare business this small-cap Melbourne-based company looks to tick the boxes as an outstanding growth prospect.
The cloud-based software Pro Medicus provides helps healthcare operators to improve the storage, sharing and administration of patient records collected in the course of providing healthcare services.
Moreover, those electronic records and medical images are only likely to soar in volume over time due to new technologies and higher standards of care, which puts Pro Medicus and its software in something of a growth sweet spot.
On a roll
The company's been winning big new contracts to prove the point and continues to grow in both private and public hospitals in the US and Europe.
The German contract win is for a public sector hospital and often once traction is gained within public healthcare sectors further success often materialises as a consequence of a market-leading reputation and the reversion to uniformity.
While public healthcare administrations globally have eye-wateringly huge budgets the private sector is also constantly looking to save costs and lift profit via the kind of technology that Pro Medicus provides.
Recently the business secured an $11 million deal over a five-year period with a private US healthcare operator in what is the world's largest private healthcare market.
Outlook
Unsurprisingly, the stock has tripled in value over the past year and the company now has a contracted revenue stream of more than $50 million over the next five years.
Based on recent share prices, Pro Medicus is now valued around $330 million with great expectations for further growth built into the price, which means any buyer at today's prices would need to be especially bullish on the company's outlook.
However, it remains that Pro Medicus has huge global healthcare markets to grow into with several tailwinds – the sky could really be the limit for this junior healthcare business.
Others operating in the healthcare and technology space worth a look include Somnomed Limited (ASX: SOM) and Primary Health Care Limited (ASX: PRY).
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