Data Insights

How does Pro Medicus perform after a contract win?

Tue 04 Feb 25, 3:31pm (AEDT)
radiology software pme
Source: Shutterstock

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.

 

Written By

Kerry Sun

Content Strategist

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

Get the latest news and insights direct to your inbox

Subscribe free