Pro Medicus Ltd (ASX: PME) shares are showing signs of life. The ASX healthcare stock jumped 4.3% on Monday to $132.38 after announcing another major contract win.
That's a strong move, but zoom out and the picture looks very different. Pro Medicus shares are still down roughly 40% in 2026, following a sharp reset in valuation.
So, what's changing?
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Major US contracts
In just two weeks, Pro Medicus has landed two significant US contracts and that's starting to shift sentiment.
The latest win came via its wholly owned US subsidiary, Visage Imaging, which has signed a five-year contract renewal with Northwestern Medicine.
This is no small client. Northwestern Medicine is a leading academic health system based in Chicago, anchored by top-ranked hospitals including Northwestern Memorial Hospital. It spans more than 200 sites across Illinois and serves as the primary teaching affiliate for the Northwestern University Feinberg School of Medicine.
The deal itself is valued at $37 million and centres on Pro Medicus' flagship Visage 7 Viewer platform, a high-performance imaging solution that continues to win traction in the US healthcare system.
And it doesn't stand alone. Just last week, Pro Medicus secured another five-year agreement, this time with the University of Maryland Medical System. That contract is worth $23 million and will see its cloud-based Visage 7 Enterprise Imaging Platform rolled out across the network, delivering a unified imaging solution for diagnostics.
Expanding US penetration
Two major wins. Two weeks. Real momentum for Pro Medicus shares. This is exactly what investors want to see from a premium-priced growth stock, continued contract flow, expanding US penetration, and validation of its technology at the highest levels.
And make no mistake, this is a high-quality business.
Pro Medicus operates in a niche but critical space. Its imaging software is deeply embedded in hospital workflows, making it sticky, high-margin, and difficult to replace. Its cloud-based model also positions it well as healthcare systems modernise infrastructure.
Valuation and concentration risk
But there are risks. The biggest one? Valuation.
Even after a 40% pullback, Pro Medicus still trades at a premium to the market. That leaves little room for execution missteps. Any slowdown in contract wins or delays in implementation could quickly hit sentiment again.
There's also concentration risk. Large contracts are lumpy, and revenue visibility can fluctuate depending on deal timing.
Still, the recent news suggests demand remains strong, particularly in the lucrative US market.
What next for Pro Medicus shares?
So, is this a sentiment changer? Brokers seem to think so.
According to TradingView data, 13 out of 14 analysts rate Pro Medicus shares as a hold, buy, or strong buy. The average 12-month price target sits at $199.60, implying potential upside of around 50% from current levels.
And the bulls are even more ambitious. The most optimistic forecasts tip the stock could climb back to $275, suggesting a potential gain of 107%.
