US medical providers are mandated to be totally digital by the end of next year. I recall reading in an industry report that only 10-20% had signed up by this time last year. Many have been in decision-making hiatus due to a couple of factors; application maker consolidation and Trump being the most significant.
There is likely to be significant catch-up between now and the end of 2018. So, more contracts likely. And given that only a small number of medical providers are signed up to anything from this century, the number to be signed up is significantly greater in orders of magnitude.
There are likely to be consolidations within and between application providers.
And there is likely to be takeover activity from Big Data.
Medical is now 16% of the US economy. That is a low hanging fruit for BD. They have the financial resources to consolidate applications through takeovers. They need to do something with those mountains of cash they have, much of it outside the US. What better way to repatriate it tax-free than through a takeover that yields a significant profit onshore?
I remember 15 years ago, when Yahoo was a big thing, that there was this thingy called Google that was pretty cool, but not profitable.
Assessing PME on fundamentals, past financial performance, will not give any indication of their potential, it will only give an idea of their viability.
My assessment is that medical will become the battlefield for Big Data (Amazon, Alphabet & Apple), and that they will pay a premium to get proven applications in their suite. They will make their money from demand for the pay-for-use model.
As for what they will pay, that is anyones guess.
Purely speculating, I'd say $35 minimum, based on a very basic metric; that is the amount necessary to make the two founders billionaires. At that price the company is a snip at $3.5bn. Cheep cheep in the internet age.
PME Price at posting:
$6.44 Sentiment: Buy Disclosure: Held
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