This healthcare name just keeps on delivering

It's an exceptional business that continues to execute very well, take share in a large and growing market, benefit from cloud adoption and it's racing toward unlocking additional annuity streams.

I do [think the share price pop was appropriate], given the financials landed slightly ahead of consensus and there's increasing visibility on the commercialisation of add-on products to the viewer platform.

I'd come back to Sam's [PME CEO Dr. Sam Aaron Hupert] comments targeting commercialisation of AI and other ologies within the next six months. Sam's not one to give too much away, at the best of times, so him making that statement carries weight.

On the earnings call, Sam mentioned having reference sites in place in the next few months.

Cardiology, breast screening, and ophthalmology have been indicated to be added to the viewer platform, and will be sold as add-on product. The company has put a lot behind developing AI and other ologies for a number of years. We'll be following closely and look forward to learning more soon.

I think the business is at an exciting juncture, but it's challenging to size the cash flow impact of adding these new revenue streams to the platform. Given the already high conventional valuation, it would be prudent to wait until the impacts of that commercialisation are observable rather than trying to predict them with the limited information available today.

I'd say healthcare is resilient relative to many other sectors. Add to this, the fact that Pro Medicus are incredibly well capitalised with over $120 million in net cash, and no debt (so rising interest rates are incrementally positive for them). Fundamentally, at the business level, they have a market-leading product. They're taking share in a market that's growing above GDP, the shift to the cloud remains a huge strategic advantage for them, as does the shrinking pool of radiologists that need to use the market-leading product to improve their productivity.

You asked about risks. We don’t see any competitors close to their current cloud offering, but that remains a key risk and area of focus. There's a big and growing market for them to go after and the stock really trades off the back of these lumpy contract wins. So I guess if we go for an extended period without any announced contract wins, we've seen in the past that the stock can go through a bit of a lull, but there's no doubt in the quality of this business and the only knock that I see on it is price.

I would say somewhere in the range of two to three. We've seen some businesses, take SiteMinder for example, which is still in cash burn mode, but it's got good visibility and provided a strong update to the market about that visibility to reach cash flow breakeven and the fundamental growth of the business.

I think that there are some interesting pockets in and around some of those that have been marked down over the last couple of years.