Why is the Pro Medicus (ASX:PME) share price jumping 4% today?

The Pro Medicus share price is on form today…
The post Why is the Pro Medicus (ASX:PME) share price jumping 4% today? appeared first on The Motley Fool Australia. –

The Pro Medicus Limited (ASX: PME) share price has been a strong performer on Thursday.

In afternoon trade, the health imaging technology company’s shares are up 4.5% to $52.94.

Why is the Pro Medicus share price charging higher?

There appear to have been a couple of catalysts for the strong performance by the Pro Medicus share price today.

One is a rebound in the tech sector following some recent weakness. At the time of writing, the S&P/ASX All Technology Index (ASX: XTX) is up a decent 2.2%.

This is more than triple the gain of the the S&P/ASX 200 Index (ASX: XJO), which is up 0.7% this afternoon.

What else is lifting its shares?

Also giving Pro Medicus’ shares a lift has been a positive reaction by a leading broker to a major new contract win.

Last week the company announced its joint largest contract to date – a seven-year, $40 million deal with US leading healthcare provider, Novant Health.

In response to the news and recent weakness in the Pro Medicus share price, the team at Morgans upgraded its shares to a hold rating with a $54.49 price target.

This price target suggests that its shares could still rise a further 3% from here.

What did the broker say?

Morgans was pleased with the contract win. It said: “A strong announcement which highlights the quality of the offering given the contract to replace multiple legacy PACS solutions for multiple products. The deal marks the seventh major contract over the last 18 months, with the five year contracted pipeline now sitting at an impressive A$350m.”

In respect to its valuation, while Morgans acknowledges that the Pro Medicus share price trades on sky-high multiples, it believes its quality and growth potential justifies this.

It explained: “While valuations remain elevated (~130x FY22 PE), we view PME as a highly impressive company with a strong and growing contracted revenue base which should continue to grow into its high multiple over time. Valuation remains the only barrier to further positivity.”

The post Why is the Pro Medicus (ASX:PME) share price jumping 4% today? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Pro Medicus right now?

Before you consider Pro Medicus, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Pro Medicus wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

ASX 200 (ASX:XJO) midday update: Gold miners jump, Pro Medicus wins contract

Pro Medicus (ASX:PME) share price dips despite positive update
5 things to watch on the ASX 200 on Friday

The Pro Medicus (ASX:PME) share price is surging 5% on Thursday
Why Afterpay, Mineral Resources, Pilbara Minerals, & Pro Medicus shares are falling

Motley Fool contributor James Mickleboro 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.

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!