Pro Medicus (ASX:PME) share price dips despite positive update

What's happening to the company's share price?

| More on:
A man scratches his head in confusion.

Image source: Getty Images

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 is falling by the wayside today regardless of the company announcing a positive update.

At the time of writing, Pro Medicus shares are down 1.25% to $53.93. This means that its shares have now dropped 10.5% in a month.

What's dragging Pro Medicus shares lower?

A catalyst for the Pro Medicus share price falling into the red today is the broader market weakness.

The S&P/ASX 200 Index (ASX: XJO) is tumbling 1.72% lower to 7,205 points following the Dow Jones' heavy losses overnight.

In today's statement, Pro Medicus advised its wholly-owned United States (US) subsidiary, Visage Imaging, Inc has signed its equal-largest contract to date.

The 7-year, $40 million deal is with US leading healthcare provider, Novant Health.

Headquartered in North Carolina, Novant Health is a community-based integrated delivery network (IDN) that spans three states.

The company services 6 million patients annually across 15 medical centres and hundreds of outpatient facilities and physician clinics.

Based on a transactional licensing model, the contract will see Pro Medicus' Visage products implemented throughout Novant Health. This includes its Visage 7 Enterprise Imaging Platform and Visage 7 Workflow module.

The suite will be employed in the Microsoft Azure cloud, delivering a unified diagnostic imaging platform across the network.

Planning for the rollout is to commence immediately, with initial go-lives targeted for the second half of the financial year.

The latest deal represents Pro Medicus' seventh major North American contract in less than 18 months.

The health imaging software company has doubled down on its efforts to rapidly grow in the North American market.

Novant Health joins an increasing number of Visage clients that opt for a fully cloud-based solution. This is a rising trend amongst healthcare providers across the US.

Management commentary

Pro Medicus CEO, Dr Sam Hupert said:

… Like several of our other recent deals, it includes more than one of our products, in this case, Visage 7 Workflow as well as Visage 7 Viewer, validating our strategy of providing clients maximum flexibility by offering a highly modular, multi-product solution.

Our pipeline remains strong. Deals like this confirm our view that Visage 7, with its proven cloud-native technology and modular design, provides us with a significant strategic advantage that enables us to address opportunities across a growing segment of the market both in North America and other regions.

About the Pro Medicus share price

Over the past 12 months, Pro Medicus shares have accelerated to post a 102% gain, with year-to-date up 53%.

The company is trading on a price-to-earnings (P/E) ratio of 185.15 and commands a market capitalisation of roughly $5.7 billion.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Pro Medicus Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Healthcare Shares

Cropped shot of an attractive young female scientist working on her computer in the laboratory.
Healthcare Shares

CSL share price leaping higher amid $1.9 billion funding news

ASX 200 investors are bidding up the CSL share price on Wednesday.

Read more »

Two happy scientists analysing test results.
Healthcare Shares

Mesoblast share price rockets 36% on breaking FDA news

ASX investors are sending the Mesoblast share price soaring following promising FDA news.

Read more »

a doctor in white coat and stethoscope stands in front of a building holding an electronic device in his hands.
Healthcare Shares

Guess which ASX 200 healthcare share is jumping 7% on a guidance update

This healthcare share is performing better than expected in FY 2024.

Read more »

a biomedical researcher sits at his desk with his hand on his chin, thinking and giving a small smile with a microscope next to him and an array of test tubes and beackers behind him on shelves in a well-lit bright office.
Earnings Results

Chemist Warehouse merger target Sigma reports 149% FY24 profit jump

This could be the last set of results from Sigma as we know it if its merger is approved.

Read more »

Cropped shot of an attractive young female scientist working on her computer in the laboratory.
Healthcare Shares

1 ASX healthcare stock that looks severely undervalued

I think this stock looks too cheap to miss.

Read more »

Stethoscope with a piggy bank and hundred dollar notes.
Healthcare Shares

Own Medibank shares? Here's why it's a rewarding day for you

Shareholders are getting a healthy boost today.

Read more »

Health professional looking at a laptop.
Healthcare Shares

Are CSL shares a must-buy in March?

Let's see what analysts are saying about this high-quality company.

Read more »

A woman jumps for joy with a rocket drawn on the wall behind her.
Healthcare Shares

This ASX healthcare stock is up 72% on FDA news and 'historic moment'

Huge gains are been recorded by this stock on Tuesday. But why?

Read more »