$PME vs. Sectra

There seems little doubt from my initial analysis that two companies are leading the global medical imaging software upgrade:

• Our own $PME, SaaS native, and most strongly-credentialled in the leading US academic medical centres (AMC), and with a strong US market focus
• Sweden's Sectra. This business has been in the game longer, has a more complete product offering: radiology, cardiology, pathology, ophthalmology, genomics, mammography etc. but is further behind in its transition to SaaS. Sectra has a broader global footprint than $PME, being well-established in Europe where $PME has struggled to gain a toehold given the regions slowness to retool with SaaS offering as well as Sectra's incumbency in it "home" region (among other possible reasons). Above all, Sectra is consistently top-rated in the influential KLAS ratings going back 13 years.

In the attached document I offer a side by side analsysis of Sectra and PME, performed by Claude (with one or two minor edits only by me). Frustratingly, as you'd expect from a first draft LLM analysis, the side-by-side comparisons are often not comparisons at all, so that's a bit frustrating, and I will work on improving that in later editions.

Despite the limitations of this "lazy analysis" (on my part) I think Section 6. Analytical Observations is insightful, so I've extracted that here into the main body of this post for those who don't wish to download the document.

Sectra vs Pro Medicus - A Comparative Analysis

My Key TakeAways

It seems pretty clear to me that, at the moment, there are two clear industry leaders. Sectra has had a head start, has the top global reputation with customers, and a broader global footprint. $PME has worked hard to focus on and succeeded in winning the prestigous leading US AMCs, suppporting its focus on the US - which leads the global industry's transition to full-stack SaaS solutions. Sectra and $PME appear to be head and shoulders above the competition.

Their CEOs will know better than anyone else, their respective strengths and weaknesses. Perhaps, having such strong competition at the top of the industry will keep both firms focused firmly on innovation and product leadership? Clearly, $PME is working hard to broaden its customer offering with the recent addition of cardioloigy and pathology. Similarly, Sectra has retooled its platform to SaaS and is part way through driving that transition.

The global market is large enough for two leaders to both succeed. But does the mutual competition at the top mean that this is a race where the leading two players will dominate, as they try to outpace/keep up with each other? Or does the advent of AI make it more feasible for othe industry players to close the gap, particularly the hyperscalers, who are also focusing on this industry, attracted by the large margins and huge datasets.

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6. Analytical Observations

6.1 Different Moats, Different Markets

PME and Sectra are best understood as competing architecturally and commercially, not just on features. PME's moat is being built through proof-of-concept at the very largest US health systems (mega-IDN, top-20 AMC), with full-stack wins creating progressively deeper switching costs. Sectra's moat is built through breadth — the widest multi-specialty coverage, the broadest global presence, and the most empirically validated customer satisfaction record in the industry. Neither moat dominates all buyer segments.

6.2 The Two-Vendor Race in US Enterprise PACS

KLAS Decision Insights data (Jan 2023–Jan 2025) positions this as a two-vendor replacement market: Sectra leading by win rate overall, PME second and strongest at the top-tier AMC segment. The displacement opportunity — primarily from GE HealthCare Centricity (KLAS Large PACS score: 63.1, last-ranked) — is large enough to sustain both vendors' growth for several years simultaneously. The critical question is whether PME's AMC reference density generates momentum into the next tier of health systems, or whether Sectra's broader satisfaction record creates a ceiling on PME's mid-market penetration.

6.3 The Pathology Divergence

Digital pathology is the most material near-term product gap between the two vendors. Sectra received FDA 510(k) clearance for primary pathology diagnostics in 2024, has 130+ labs globally, has diagnosed over 4 million cases, and has active partnerships with Paige.AI and Leica. PME's RadPath Hub is early-stage and not yet a disclosed commercial product. If pathology emerges as a significant adjacent revenue opportunity — which Sectra's 10-year investment suggests it believes it will — PME faces a multi-year disadvantage in this category.

6.4 Geography as Structural Difference, Not Just Risk

PME's ~90% North American concentration and Sectra's 60+ country presence reflect genuinely different business designs, not merely different stages of the same journey. PME's US AMC template has not successfully replicated in Europe (despite years of presence in Germany); European public tender structures, smaller contract sizes, and different reimbursement frameworks make the economics structurally less attractive. Sectra's NHS and Nordic public-sector relationships reflect a very different go-to-market capability. For investors, this means PME's TAM is more concentrated but better proven; Sectra's is broader but more complex to monetise uniformly.

6.5 Valuation Asymmetry

PME trades at approximately 79–137x earnings depending on the P/E basis used (forward FY26 consensus vs historical FY25); Sectra trades at approximately USD 4.5B market cap on ~USD 308M trailing revenue — a meaningful premium to an average software business, but materially lower than PME's multiple. PME's premium reflects the market's expectation of sustained 17–18% revenue growth compounding over a decade-plus horizon. Sectra's lower multiple reflects slower near-term reported growth (SaaS transition headwinds) despite record order bookings. The order book comparison — PME's A$1.08B (5-year) vs Sectra's SEK 8.7B (~USD 826M, guaranteed) — suggests Sectra's forward revenue visibility may be underappreciated relative to its current valuation.

That's a great analysis @mikebrisy . As a recent entrant to the share register I'm starting to take an active interest in PMEs growth prospects. I did a bit more digging into their main competitor Sectra, based in Sweden, and was a bit surprised to find their revenue is both greater than PMEs and far more geographically diversified.

"Sectra is one of the world’s leading providers of IT systems for managing medical images and patient information related to diagnostic imaging. We have more than 2,500 installations of medical IT systems worldwide, including several of the world’s top-ranked hospitals.

Sectra was once again ranked #1 in customer satisfaction worldwide.

Sectra’s radiology module (Sectra PACS) received a top ranking for the thirteenth year in a row in the US and for the seventh year in a row in Canada. Sectra also won the global PACS categories in Northern Europe, Southern Europe, DACH, Middle East/Africa and Oceania. The “Best in KLAS” awards are handed out by the US analyst company KLAS Research, which conducts annual customer satisfaction surveys for healthcare IT systems. https://sectra.com/bestinklas "

PME revenue in FY 25 was $213m AUD, Sectra FY24/25 revenue (Medical IT division) was $432m AUD. (There are two other business divisions but Medical IT is far and away the biggest division.)

The geographic split of sales in the last FY was:

US 32%

UK 22%

Sweden 12%

Netherlands 4%

Rest of Europe 21%

Rest of World 9%

So PME can claim a greater revenue in the US, but Sectra has nearly double the revenue overall, and is much more diversified globally. Sectra also consistently comes out on top in the Klas Research annual surveys of healthcare IT providers, whereas PME curiously barely gets a mention.