How does Pro Medicus perform after a contract win?
We take a closer look at all of Pro Medicus' contract wins since 2023 and how the stock performed on the day of the announcement.
Source: Shutterstock
Mentioned
Pro Medicus (ASX: PME) hit another fresh all-time high on Tuesday, up 4.7% and crossing $280 a share for the first time on record. The rally follows the announcement of a $53 million, seven-year contract with BayCare, a leading healthcare system in Florida.
One of Pro Medicus' key growth drivers is its ability to secure contracts across the US, Australia, and Europe. Since 2023, the company has announced 19 contracts, predominantly with US-based healthcare systems. Below, we're going to observe the key contract details as well as how the share price performed on the day of and day after the announcement.
Contract Wins Since 2023
Date | Contract | Min Value (A$m) | Term |
|---|---|---|---|
16/01/2025 | University of Kentucky | 33 | 9 |
30/12/2024 | Duke University Health | 15 | 5 |
23/12/2024 | Duly Health & Care | 30 | 7 |
27/11/2024 | Trinity Health | 330 | 10 |
16/10/2024 | NYU Langone | 24 | 5 |
7/10/2024 | HMED (Expansion 2) | 32 | 5 |
28/05/2024 | Mercy Health | 98 | 8 |
28/05/2024 | Consulting Radiology | 9.5 | 5 |
28/05/2024 | Nationwide Children's Hospital | 11.5 | 7 |
28/05/2024 | Nicklaus Children's Hospital | 6.5 | 5 |
28/05/2024 | Moffitt Cancer Center | 9 | 8 |
13/11/2023 | US Radiology Specialists | 8.5 | 5 |
23/10/2023 | Oregon Health & Science University | 20 | 8 |
26/09/2023 | South Shore | 16 | 8 |
27/07/2023 | Baylor Scott White | 140 | 10 |
16/05/2023 | Memorial Sloan Kettering | 24 | 7 |
30/01/2023 | Gundersen Health System | 20 | 7 |
20/01/2023 | Samaritan Health Services | 12 | 8 |
Source: Pro Medicus
Key Insights
Largest contract was Trinity Health $330 million (27-Nov-24) for a yen-year contract
Average contract value of $46.6 million
Average contract term was seven years
Share Price Reaction
Next, we examine the key contract details alongside how the share price reacted on the announcement day and the following trading session.
Date | Contract | % Chg | Open to Close | Next Day |
|---|---|---|---|---|
16/01/2025 | University of Kentucky | -0.4% | -2.9% | -1.5% |
30/12/2024 | Duke University Health | 0.0% | 0.5% | -3.0% |
23/12/2024 | Duly Health & Care | 2.7% | 3.2% | -2.1% |
28/11/2024 | Trinity Health | 8.7% | 7.0% | 1.5% |
16/10/2024 | NYU Langone | -2.4% | -3.1% | 2.7% |
7/10/2024 | HMED (Expansion 2) | 1.8% | 1.7% | -1.6% |
28/05/2024 | Mercy Health | 0.9% | -4.3% | 1.4% |
13/11/2023 | US Radiology Specailists | 0.1% | -1.2% | 0.3% |
23/10/2023 | Oregon Health & Science University | 1.5% | 3.1% | -2.0% |
26/09/2023 | South Shore | 12.4% | 6.9% | 0.8% |
27/07/2023 | Baylor Scott White | 1.5% | 0.3% | 2.0% |
16/05/2023 | Memorial Sloan Kettering | -0.6% | -0.9% | -0.3% |
30/01/2023 | Gundersen Health System | 1.2% | 0.4% | 1.5% |
20/01/2023 | Samaritan Health Services | 1.8% | 1.0% | 1.8% |
Source: Pro Medicus, Market Index | Trinity Health contract was announced after-hours on 27-Nov-24
Key Insights
On the day of the announcement, Pro Medicus shares:
Up an average 1.8%
Median gain of 0.9%
Positive 83.3% of the time
In terms of intraday price action (from open to close):
Down an average 0.3% (median also -0.3%)
Up just 50% of the time
This implies that the share price more or less settles lower than the open. While the share price might open higher, investors aren't that keen to bid the stock any higher.
The day after the announcement, the stock tends to:
Average gain of 0.4%
Median gain of 1.4%
Positive 66.7%
While Pro Medicus shares often open higher following contract announcements, the stock tends to settle lower by the close. This suggests some profit-taking or cautious investor sentiment. However, the positive trend on the following day implies that analyst upgrades and broker responses tend to provide further support, reinforcing confidence in the company's long-term growth trajectory.
