Pro Medicus (ASX:PME) share price drops despite inking new contract

The Pro Medicus share price is trading lower today despite the company announcing a major contract renewal with Zwanger Pesiri in the US.
The post Pro Medicus (ASX:PME) share price drops despite inking new contract appeared first on Motley Fool Australia. –

falling healthcare asx share price represented by doctor grimacing at x-ray

The Pro Medicus Limited (ASX: PME) share price is trading lower today despite the company announcing a major contract renewal with one of the largest private outpatient radiology providers in the United States. At the time of writing, the Pro Medicus share price has fallen 1.87% to $31.53, which is largely in line with the broader fall in healthcare sector shares today. 

What’s in the deal?

Health imaging company, Pro Medicus, today announced that its wholly-owned US subsidiary, Visage Imaging Inc., has signed a 5-year renewal contract with US-based, Zwanger Pesiri. The contract, which is constructed on a transaction-based licensing model, will see the ‘Visage 7’ technology continue to be used across all Zwanger Pesiri locations for the next 5 years.

The contract announced today follows another significant contract win Pro Medicus inked earlier this month, when it announced a 7-year deal worth $10 million with one of the largest university hospitals in Germany, LMU Klinikum. In that deal, the Visage 7 technology was to be deployed throughout LMU Klinikum’s radiology and sub-specialty imaging departments. 

What did management say?

Commenting on the deal today, Pro Medicus Chief Executive, Dr Sam Hupert said:

We are very pleased to have played such a key role in Zwanger Pesiri’s growth over the past 5 years. We believe our solution provides the best return on investment of any system in the market from both financial and clinical perspectives. We think the results we achieved at Zwanger Persiri is validation of that.

Zwanger Pesiri was also pleased with the contract renewal, with chief, Dr Steve Mendelsohn, echoing Hupert’s sentiment:

We have had a great partnership with Visage over the preceding 5 years. The speed and capabilities of their software is unrivalled in the market. Since implementing it 5 years ago, we have experienced significant increases in radiologist productivity and clinical accuracy which has underpinned our substantial growth over that time.

What does Pro Medicus do?

Pro Medicus provides healthcare imaging software and services to hospitals, diagnostic imaging groups and other health related entities in Australia, North America and Europe. The company has more than 30 years’ experience in providing radiology information systems and imaging technology. 

How is the Pro Medicus share price performing in 2020?

After explosive growth in 2019, the Pro Medicus share price has been able to successfully navigate the impacts of COVID-19 in 2020. Pro Medicus shares have increased by more than 41% to $31.53 in 2020. As a comparison, the S&P/ASX 200 Health Care Index (ASX: XHJ) has risen by 12% this year. Pro Medicus commands a market capitalisation of $3.4 billion.

These 3 stocks could be the next big movers in 2020

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.

Find out the names of our 3 Post COVID Stocks – For FREE!

*Returns as of 6/8/2020

More reading

Eddy Sunarto 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 Pro Medicus Ltd. 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.

The post Pro Medicus (ASX:PME) share price drops despite inking new contract appeared first on Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!