ASX 200 tech stock could rise 70%

Buying ASX 200 stocks when they are being underestimated has consistently proven to be one of the most effective ways to create wealth for Australian investors.

Periods of price weakness often present opportunities to accumulate high-quality businesses at attractive valuations before sentiment improves.

Pro Medicus appears to fit this profile today, with strong fundamentals and growth momentum despite a sharp decline in its share price in 2026.

Pro Medicus Limited (ASX: PME) 

has a current market capitalisation of $13.87 billion and the stock is now in undervalued territory as it has declined nearly 40% year-to-date despite strong operational performance.

Strong Financial Performance and Operating Leverage

The company in HY26 reported impressive financial results as revenue rose 28.4% year-on-year to $124.8 million which shows strong growth compared to the prior corresponding period.

Underlying EBIT reached $90.7 million after a rise of 29.7% while margins stayed very high at 72.6% which reflects the scalability of its capital-light business model.
Profit after tax came in at $171.2 million after a sharp increase of 230.9% year-on-year which shows strong operating leverage as the business scales globally.

The balance sheet is very strong as cash and investments increased to $221.8 million while the company continues to be debt free.

These results show that even though the share price has weakened recently, the core business has improved significantly and valuation risk has also reduced.

Solid contracts pipeline

Recent updates support this growth outlook as several high-value contract wins were announced in April 2026.

On 8 April 2026, Pro Medicus signed a 5-year $23 million contract with the University of Maryland Medical System which will roll out its cloud-based Visage 7 platform across the network. This agreement follows a transaction-based model which offers potential upside whenever usage volumes increase and improves long-term revenue certainty.

Soon after on 13 April 2026, the company announced a 5-year $37 million contract renewal with Northwestern Medicine which came at higher pricing and higher minimum volumes.

Management stated that close to $80 million in renewals were secured within one month which shows strong client retention and pricing power.

Long-term growth outlook and industry position

The company benefits from a transaction-based SaaS model where forward contracted revenue is more than $1 billion over five years which provides predictable and recurring income.
Pro Medicus operates in an attractive market because demand for medical imaging is rising and there is a global shortage of radiologists.

Its Visage 7 platform is seeing strong adoption across major healthcare systems as 11 of the top 20 U.S. hospitals now use this technology.

The platform has a cloud-native design and fast implementation along with AI integration which gives a strong advantage over legacy systems.

Growth strategy focuses on expanding its presence and increasing transaction volumes from existing clients while also launching new AI-enabled products which creates multiple long-term drivers.

Overall, the company is well positioned to achieve sustained long-term growth and shareholder value from current levels because of strong financials and a solid pipeline along with favourable industry trends.

(Source: Company Announcements)