Pro Medicus Ltd (ASX: PME) shares are trading lower on Monday morning.
At the time of writing, the health imaging technology company’s shares are down almost 1% to $131.67.
Why are Pro Medicus shares falling?
Investors have been selling the company’s shares today after broad market weakness offset the announcement of two major contract renewals in the United States.
If the ASX 200 index was not being sold-off today and down 3.2% at the time of writing, Pro Medicus shares would likely be charging higher.
According to the release, the company’s wholly owned US subsidiary, Visage Imaging, has signed two five-year contract renewals with a combined minimum value of $40 million.
Pro Medicus revealed that the largest of the deals is a $31 million renewal with MedStar Health, which is one of the largest healthcare systems in the Maryland and Washington, D.C. metropolitan region.
Under the agreement, MedStar will continue using the full suite of Visage 7 modules, including the Visage 7 Viewer, Open Archive, and Worklist products. The renewal will also add the company’s Visage 7 Cardiology imaging module.
In addition, Pro Medicus has secured a $9 million five-year renewal with Zwanger-Pesiri, which is a large private outpatient radiology provider based on Long Island in the United States.
The release reveals that both agreements are transaction-based contracts and, importantly, were negotiated at higher per-transaction fees. This means the total value could increase depending on usage volumes.
Management commentary
Pro Medicus’ CEO, Dr Sam Hupert, was pleased with the news and highlighted the significance of the MedStar renewal, noting that it was the company’s first fully cloud-deployed customer. He said:
The Medstar renewal is notable in that MedStar was our first fully cloud deployed customer and has grown considerably since their initial go live. Renewing this contract, and adding the Cardiology product, confirms our belief that we have the preeminent and most scalable enterprise imaging solution, that is fully cloud native.
Dr Hupert also commented on the Zwanger-Pesiri renewal, noting the long-standing relationship between the companies. He adds:
We are very pleased to have played such a key role in Zwanger Pesiri’s growth over the past 10 years. Zwanger-Pesiri have now renewed for a third contract term, re-iterating our belief that our solution provides the best return on investment of any system in the market from both a financial and clinical perspective.
With new contract renewals secured at higher transaction pricing and additional product adoption from existing customers, investors appear pleased with the latest update.
The post Pro Medicus shares fall after market selloff overshadows $40 million contract news appeared first on The Motley Fool Australia.
Should you invest $1,000 in Pro Medicus right now?
Before you buy Pro Medicus shares, consider this:
Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Pro Medicus wasn’t one of them.
The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
And right now, Scott thinks there are 5 stocks that may be better buys…
* Returns as of 20 Feb 2026
.custom-cta-button p {
margin-bottom: 0 !important;
}
More reading
- What I’d buy if the ASX share market crashes
- If I wanted to outperform the ASX 200 over the next 10 years, I’d focus here
- 3 amazing Australian shares for beginners to buy in March
- Here are the top 10 ASX 200 shares today
- 3 buy-rated ASX growth shares tipped to rise 30% to 125%
Motley Fool contributor James Mickleboro has positions in Pro Medicus. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Pro Medicus. The Motley Fool Australia has recommended Pro Medicus. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.