Pro Medicus Shares Hit Near Two-Month High as New US Hospital Contracts Spark Broker Upgrades and 4.7% Jump

SYDNEY — Shares of Pro Medicus rose 4.7% on Thursday to their highest level in nearly two months, extending a rally driven by new U.S. hospital contracts and more optimism from brokers.

The medical imaging software company's stock gained A$8.59 to close at A$193.42. It reached an intraday high of A$194.99, its highest since late August. The company's market value is about A$20 billion.

The gain came even though the broader S&P/ASX 200 index fell 0.43%.

A strong week

Thursday's rise added to a strong run. Pro Medicus shares rose about 3% on Wednesday to A$184.83, and had risen about 13% over the past week before Thursday's session.

The rally began after the company announced two new seven-year contracts. One was a A$43 million agreement with U.S. health system Virtua Health covering Visage 7 Viewer, Workflow, Cardiology and Open Archive products.

Brokers raise expectations

Jefferies raised its price target slightly to A$199 from A$198.30 and kept a hold rating. The firm said revenue from the Virtua contract should begin at the start of fiscal 2028. It also said its forecasts already assumed new contract wins, so the deal does not significantly change its near-term estimates.

Morgans upgraded the stock to buy from accumulate and kept its A$230 price target. The broker said investors are now focused on the Radiological Society of North America conference in late November "as the likely window for a larger deal."

Citi recently confirmed its buy rating with a A$225 target. According to TradingView data, most analysts covering the stock rate it a buy or strong buy, with some targets as high as A$250.

High margins, falling shares

Pro Medicus, based in Melbourne, sells Visage imaging software to hospitals and imaging groups, mainly in the United States. Its cloud-based platform lets radiologists view and manage large medical images quickly.

The company is known for very high profit margins. In fiscal 2026, its underlying EBIT margin was about 75%, one of the highest among ASX-listed companies.

Even with this week's rally, the stock has fallen sharply from its peak. It is down about 32% over the past year and about 17% this year. It has traded as low as A$107.75 over the past 52 weeks.

Investors have sold the stock partly because of its high valuation. It trades at about 76 times trailing earnings, much higher than most companies on the ASX. With expectations that high, the stock often moves sharply on news about new contracts or delays.

Busy year ahead

Morgans noted that the company has many new systems scheduled to go live in the first quarter of 2027, which should support revenue in fiscal 2028.

Pro Medicus also added Tim Reed as an independent nonexecutive director on Oct. 1.

What to watch

The RSNA conference in Chicago in late November will be the next big event. Pro Medicus has often announced major contracts around the conference, which is one of the largest events for medical imaging companies.

Investors will also watch how quickly new contracts start generating revenue and whether the company can keep winning business in the U.S. hospital market.