Citi initiates coverage on Pro Medicus with a Sell rating and a $45 target price. The provider of Picture Archiving and Communication Systems (PACS) and radiology information systems (RIS) derives around 75% of revenue from the US and 20% from Australia.
The company plans to expand further into Europe. The analyst perceives the biggest risk is a competing product to the company’s flagship Visage, with similar features at a lower price.
Citi believes the current share price is overly-optimistic. It’s thought to incorporate an accelerated expansion and significant market share gains, while the company maintains an earnings (EBIT) margin greater than 65%.
Sector: Health Care Equipment & Services.
Target price is $45.00.Current Price is $59.31. Difference: ($14.31) – (brackets indicate current price is over target). If PME meets the Citi target it will return approximately -32% (excluding dividends, fees and charges – negative figures indicate an expected loss).
