It is a fantastic company with 50% of revenue going into the bottom line, and the revenue is growing strongly. But is currently trading at ~150x revenue. What does this mean? Given that it has 9% market share, and if it achieves the improbable and absolute dominance of this market at a 90% market share, its revenue will go up by 10x. At that point, the investor is left with a very profitable, but barely growing business at 2-3% pa. Assume at that point 70% of revenue becomes the bottom line, which is the maximum possible, then the PE will be 150x/10/0.7=21.4, which is about right for a very profitable but slow growing business in a relatively low interest rate environment. At its growth rate of ~30%pa, it takes about 8 years to grow 10x. So given today's price implies a PE of ~21 in 8 years under the most optimistic assumptions, the investor will get nothing for 8 years.
This simple math illustrates how a most excellent business can become absurdly valued. If the investor wants to get 10%pa for his risk for sitting 8 years on it, then under the best assumptions the share price must more than halve today to deliver the 10% return for the next 8 years. Anything less optimistic than the above assumptions will decimate the share price in those intervening 8 years despite the company being a fantastic business.
This is just some rational illustrations for this super-expensive stock. Don't take this as a given. I am not an advisor. Do your own analysis of the future scenarios and draw your own conclusions. I have followed this stock since its listing. It was one of the great success stories in the health technology space. I am only highlighting the current valuation issue. Other than that, I absolutely admire the company's management for building this incredible business.
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- Ann: HY25 Results Presentation
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pro medicus limited
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$323.98

Ann: HY25 Results Presentation, page-8
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Last
$323.98 |
Change
-4.270(1.30%) |
Mkt cap ! $33.84B |
Open | High | Low | Value | Volume |
$323.50 | $327.58 | $318.07 | $45.58M | 140.9K |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
2 | 70 | $323.93 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$324.85 | 66 | 1 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
2 | 70 | 323.930 |
2 | 3 | 322.000 |
1 | 62 | 321.680 |
3 | 76 | 319.000 |
1 | 3 | 318.700 |
Price($) | Vol. | No. |
---|---|---|
324.850 | 66 | 1 |
325.500 | 45 | 2 |
325.700 | 250 | 1 |
325.780 | 70 | 2 |
325.980 | 679 | 2 |
Last trade - 16.10pm 23/07/2025 (20 minute delay) ? |
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