Never catch a falling knife is the adage stock market investors should never forget. Sometimes even the best growth stocks shed a lot of weight before investing flock returns. One among such growth stocks is
Pro Medicus Limited (ASX: PME)
Leading health imaging company Pro Medicus Limited (ASX: PME), in its interim results on 13 February 2025, reported a strong financial performance for the half-year ending December 2024, achieving record revenue and net profit. The company recorded revenue of $97.2 million, marking a 31.1% increase, driven largely by its North American operations, which contributed $86.4 million, up 34.6% from the previous year. Underlying profit before tax rose by 42.9% to $69.9 million, while net profit increased by 42.7% to $51.7 million. EBIT margins improved significantly to 72% compared to 66% in the previous corresponding period.
The company remains debt-free and has a strong financial position, with cash and other financial assets totaling $182.3 million, representing a 17.7% increase. As a result of its robust financial performance, Pro Medicus declared a fully franked interim dividend of 25 cents per share.
During the period, the company secured several major contracts, including agreements with Trinity Health, Lurie Children’s Hospital, and Duly Health and Care, collectively valued at $365 million over 7–10 years. Additionally, Pro Medicus renewed key contracts with Mercy Health in the U.S. ($98 million, 8 years) and an Australian radiology practice ($32 million, 5 years). The company also expanded its offerings within existing contracts at Duke Health and NYU Langone, adding archive solutions worth a combined $39 million over five years.
The company’s confidence in the company’s growth trajectory was because of its opinion that newly won contracts will contribute to revenue in future periods. The improved margins were primarily driven by an increase in transaction revenue. The company’s technology continues to gain traction in the market, with its modular approach allowing flexibility and scalability for various healthcare providers.
Pro Medicus remains one of the growing companies to invest in since it is optimistic about its growth pipeline, particularly in the U.S. market. The company anticipates further expansion, leveraging opportunities from its strong presence at the annual RSNA conference and ongoing interest from healthcare providers in transitioning to cloud-based imaging solutions.
(Source: Company's Report)
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