Pro Medicus Shares have Surged 75% Since Their February 2026 Lows. Are They Still a Good Buy?

The sharp rebound in Pro Medicus shares has renewed investor confidence as it secured several large contracts and strengthened its competitive position in global healthcare imaging.

Pro Medicus Limited (ASX: PME)

Pro Medicus Limited (ASX: PME) has made one of the strongest recoveries on the ASX in recent months. The healthcare technology company's share price has risen by about 75% since reaching its low in February 2026 which is a reflection of renewed investor confidence after a series of contract wins and strategic initiatives.

The stock is still trading about 42% below its level from 12 months ago which shows how severe the earlier sell-off was and current market capitalisation is about $19.7 billion. 

Excellent Execution

The company in the first half of FY26 reported record revenue of $124.8 million which increased 28.4% from the prior corresponding period. Underlying EBIT rose 29.7% to $90.7 million which produced an outstanding EBIT margin of 72.6%. It finished the half with $221.8 million in cash and investments while remaining completely debt free. The company also increased its fully franked interim dividend by 28% to 32 cents per share which highlighted both its profitability and financial strength. Pro Medicus earns much of its revenue through transaction-based SaaS contracts unlike many traditional software providers. Once the software has been deployed it requires relatively little additional capital investment which means each new customer contributes disproportionately to earnings growth. 

Recent Announcements Reinforce the Growth Story

The company's strong operational momentum has continued well beyond the February results announcement. Pro Medicus on 4 June 2026 announced a five-year $16 million contract renewal with The Ohio State University Wexner Medical Center which is one of the leading academic medical centres in the United States.

It also increased both the minimum transaction volumes and the fees per transaction. Management noted that total contract renewals during the financial year had reached $141 million which reinforced the company's exceptional client retention record. Pro Medicus on 25 June 2026 announced another important strategic development as it signed a binding Heads of Agreement with Echo IQ. The proposed arrangement includes an initial $10 million investment together with the option to invest another $10 million after FDA clearance of Echo IQ's heart failure solution. It also includes a reseller agreement which would allow Pro Medicus to market Echo IQ's AI powered cardiovascular software to its extensive US customer base.

Conclusion

The recent 75% rally means investors are now paying a much higher price than they could have only a few months ago but the business is much stronger today than it was before the recovery began. The balance sheet is exceptionally strong and the company continues to win large enterprise contracts with many of the world's leading healthcare organisations. One factor to consider is that any slowdown in contract wins or broader weakness in technology valuations could result in periods of share price volatility similar to those seen earlier this year.

Many of the company's long-term growth drivers also remain at an early stage as the global shift towards cloud-based medical imaging and wider adoption of artificial intelligence all create meaningful opportunities for future growth.

(Source: Company Announcements)