Pro Medicus Ltd

PME: XASX (AUS)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	A$14.00	Rjtvjh	Fmtgqqw

Pro Medicus: Clients Continue to Renew at a Higher Price Point

Shane Ponraj

Oct 8, 2024

We maintain our AUD 37 fair value estimate for narrow-moat Pro Medicus following a contract renewal with its client, Mercy Health. The renewed contract achieved an increased fee per transaction and factors in higher patient volumes. It has a committed minimum value of AUD 98 million over eight years versus AUD 36 million over seven years previously. Our revenue forecasts increase by an average of 1%, but we maintain our midcycle 73% EBIT margin by fiscal 2034 from 70% in fiscal 2024.

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