Have investors in one of Australia’s most dazzling home-grown ASX success stories missed the boat?

Now worth just shy of $10 billion, the US-focused diagnostic imaging hero Pro Medicus (ASX:PME) has had a ripper year with its share price surging 65 per cent in an otherwise dodgy year for ASX healthcare stocks.

Founded by Melbourne GP Sam Hupert and technology dude Anthony Hall in 1984, Pro Medicus was perceived as serving prestigious but low-growth ‘sandstone’ academic hospitals such as Mayo Clinic and New York University.

But a string of recent US wins in the broader private hospital sector has put paid to that notion. These include the $140 million sign-up of Texan hospital chain IDN Baylor Scott & White Health, the company’s biggest deal to date.

Pro Medicus products cover image viewing, storing and handling, so that doctors and radiologists can view the pics from the ‘cloud’ anywhere, anytime.

The eight most recent client signings have been for all the products – ‘full stack’ in ghastly tech speak – which is no mean feat given the presence of large incumbent legacy suppliers.

In 2022-’23 the company posted revenue of $125 million, up 33 per cent with a net profit up 36.5 per cent to $60.6 million.

Still, Pro Medicus analysts tend to view the stock as a tad expensive even though they don’t want to say so.

RBC Capital Markets is “positive” on the stock but rates it as “sector perform” – a hold – with a price target of $70 per share compared with the current $85.

Goldman Sachs ascribes a buy but with a modest price target of $88. On the firm’s reckoning, the stock is trading on a current-year earnings multiple of 100 times.

Then again, the stock has always traded at a lofty valuation and has never failed to deliver.

An outlier, Morningstar scoffs that the company’s tools are “largely superfluous outside of the academic hospitals with big endowments and [we] expect wider adoption to continue to be slow.”

There’s always a party pooper – even in the festive season.

For those who feel the good ship S.S. Value has steamed away, Mach 7 Technologies (ASX:M7T) is a cheaper, less evolved alternative.

Mach 7 and Pro Medicus operate in subtly different sectors, but share a similar goal of dragging the US health system away from clipboards and into the ‘cloud’.

Last financial year the Virginia-based Mach 7 reported sales growth of $43 million, up 21 per cent – its third consecutive year of growth. Underlying net profit grew 16 per cent to $7.2 million, but amortisation costs saw a net loss of $1 million.

Management reported a healthy September quarter sales order book of $33.5 million. This month the company re-signed the Virginia/North Carolina hospital operator Sentera Health in a $10 million, five-year deal.

If the $173 million market cap Mach 7 is the Pro Medicus ‘mini-me’, Imexhs (ASX:IME) is the ‘mini-mini me’.

Imexhs who? Most folk confuse the company with either INXS or Imax cinemas, but it provides similar imaging tools across 461 sites in 18 countries. Founded in Bogota, Colombia, the business is biased to central and South America.

Imexhs reported third (September) quarter revenue of $5.2 million, up 36 per cent with annual recurring revenue of $25 million.

With a $27 million valuation, Imexhs is worth 370 times less than Pro Medicus despite revenue being only six times lower. Mach 7 is worth about 50 times less and its revenue is about three times lower.

Of course the Pro Medicus founders would dispute any inference that their company is overvalued. With a 25 per cent stake each, they’ve got more skin in the game than a Beverly Hills plastic surgeon, despite peeling off one million shares each last month.

This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

The views, information, or opinions expressed in the interviews in this article are solely those of the interviewees and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.