RadNet (RDNT) has agreed to acquire a majority stake in Intermountain Medical Imaging’s five outpatient centers in Boise, Idaho, and will roll out DeepHealth AI tools across the joint venture’s diagnostic imaging operations.

At a share price of US$56.55, RadNet’s 1 year total shareholder return of 8.31% and 3 year total shareholder return of around 2x sit alongside a 20.30% year to date share price decline. This suggests that recent momentum has softened even as the market has rewarded longer term holders, with the Intermountain joint venture and the upcoming first quarter 2026 earnings call likely shaping how investors reassess growth potential and risk.

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With RadNet trading at US$56.55, showing an intrinsic discount and a sizeable gap to analyst targets, the key question is whether the recent share price pullback leaves upside on the table, or if future growth is already fully priced in.

Most Popular Narrative: 37.4% Undervalued

At a last close of $56.55 versus a narrative fair value of $90.38, RadNet is framed as materially undervalued, with that gap anchored in revenue and margin assumptions stretching several years out.

Ongoing investments in AI-powered imaging solutions (e.g., DeepHealth, See-Mode, iCAD) are materially increasing center throughput, boosting capacity utilization, and driving more high-margin advanced procedures, directly enhancing both revenue growth and EBITDA margins as adoption scales through 2026.

Curious what kind of revenue runway and margin lift could justify this valuation gap, and what earnings profile that implies by the late 2020s? The most followed narrative lays out a detailed path built on compounding top line growth, rising profitability, and a rich future earnings multiple that some investors usually associate with faster growing sectors.

Result: Fair Value of $90.38 (UNDERVALUED)

However, heavy spending on AI and digital health, plus any setback in reimbursement terms, could quickly challenge the idea that RadNet’s current valuation gap is justified.

Another Way To Look At Valuation

While the narrative fair value of $90.38 suggests upside, the current P/S ratio of 2.2x sends a different signal. It is higher than the US Healthcare industry at 1.2x and the fair ratio of 0.9x, even though it sits below the 3.9x peer average. For you, that spread raises a simple question: is the market still pricing in too much optimism or not enough?

Next Steps

With mixed signals on valuation, risks, and rewards, this is the moment to look through the data yourself and decide what the story really is. To see how the positives stack up against the concerns, take a closer look at the 3 key rewards and 1 important warning sign

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.