Why the Pro Medicus share price stormed 7% higher today

The Pro Medicus Limited (ASX:PME) share price has stormed 7% higher on Thursday after releasing an impressive half year result…

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Pro Medicus Limited (ASX: PME) share price has been amongst the best performers on the Australian share market today with a 7% gain to $14.92.

This latest gain means that the medical imaging company's shares are closing in on their all-time high and are up 95% since this time last year.

Why is the Pro Medicus share price storming higher?

This morning Pro Medicus released its half year results which revealed further impressive top line and bottom line growth.

During the six months to December 31, the company posted a 59.4% increase in revenue to $25.3 million and a 79.9% jump in underlying net profit after tax to $9.2 million.

This was driven by strong growth in all its key markets. Revenue increased by 40% in North America, by 30% in Australia, and by 204% in Europe.

This strong form allowed the company to declare a fully franked interim dividend of 2.5 cents per share and a special fully franked dividend of 3.5 cents per share.

The company's CEO, Dr Sam Hupert, appeared to be very pleased with the company's performance during the first half.

Dr Hupert said "The interim result was particularly pleasing in that we saw solid growth in all three major jurisdictions. There was a significant up-tick in transaction revenues in the US as a greater number of transactions flowed from our Yale and Mayo implementations, our implementations in Australia are progressing well and our wholly-owned European subsidiary, Visage Imaging GmbH, signed a A$3+million extension to the contract it has with a large German Government Hospital network."

Pleasingly, the company is well placed to continue its growth. Dr Hupert revealed that its "North American pipeline continues to be strong both in terms of quantity and quality of prospects and we are seeing an increasing number of new opportunities, so we feel we are well placed."

Should you invest?

Whilst Pro Medicus' shares appear expensive at 92x trailing earnings, I think they are fairly priced given its current growth profile.

I believe the quality of its products and their sizeable market opportunities means Pro Medicus is capable of growth its earnings at a strong enough rate over the next decade to justify this premium.

This could make it worth considering along with fellow fast-growing healthcare shares Nanosonics Ltd (ASX: NAN) and Volpara Health Technologies Ltd (ASX: VHT). Though, it is a high risk option given the premium and may be unsuitable for some investors.

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Nanosonics Limited, Pro Medicus Ltd., and VOLPARA FPO NZ. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Gainers

A happy young couple lie on a wooden deck using a skateboard for a pillow.
Share Gainers

These were the best-performing ASX 200 shares in March

These shares made their shareholders smile in March thanks to some very big gains.

Read more »

Stock market chart in green with a rising arrow symbolising a rising share price.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a massive day for the ASX 200, with a new all-time high recorded.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Mesoblast, Newmont, Pilbara Minerals, and Platinum shares are jumping

These ASX shares are ending the week strongly. But why?

Read more »

A young male ASX investor raises his clenched fists in excitement because of rising ASX share prices today
Share Gainers

3 ASX All Ords shares up 50%+ in March

These ASX shares have been on fire this month. But why?

Read more »

Woman looks amazed and shocked as she looks at her laptop.
Share Gainers

Why Mesoblast, Patriot Battery Metals, Sigma, and Zip shares are pushing higher

These shares are having a good session on hump day. But why?

Read more »

Woman looks amazed and shocked as she looks at her laptop.
Consumer Staples & Discretionary Shares

If you'd put $20,000 in this ASX retail stock at the start of 2023, you'd have $134,000 now

This online retailer has executed a remarkable turnaround for its investors.

Read more »

Fancy font saying top ten surrounded by gold leaf set against a dark background of glittering stars.
Share Gainers

Here are the top 10 ASX 200 shares today

It was back to earth for ASX shares this Tuesday.

Read more »