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Investing.com - Pro Medicus Ltd (ASX:PME) a leading supplier of radiology information systems, has secured five new US cloud contracts, according to a research note from RBC analysts. These contracts span across diverse customers including radiology groups, hospitals, and cancer centers, and represent a minimum contracted value of AUD $45 million over an average of six years.
RBC analysts noted that "our contract build up of implementations implies PME has now likely achieved FY25e consensus revenue, implying new wins from here are additive."
As a result, analysts have raised the FY25e EBIT estimate by 3%, and have also increased outer year growth rate estimates and terminal multiple. This translates to a revised price target of $115.00 per share.
The RBC research note highlights the solid sales pipeline across academic, large/mid-sized health networks, and the likely maintenance of current margin levels in FY24.
Despite the positive outlook, the RBC analysts maintained a 'Sector Perform' rating on Pro Medicus due to its valuation. They point out that the company is trading close to fair value based on their DCF valuation and historical trading multiples.
