The hefty decline of the Pro Medicus Ltd (ASX: PME) share price has created a rare buying opportunity in one of Australia’s top shares.
Sell-offs are not common on the ASX share market, but when they happen, they can lead to a major reduction in the valuation. The Pro Medicus share price has dropped around 50% from October 2025, as the chart below shows.
I think Pro Medicus is one of the best ASX shares, so such a large correction means it’s much better value for investors.
Why it’s one of Australia’s top shares
The business provides a full range of medical imaging software and services to hospitals, imaging centres, and healthcare groups worldwide. Many of its main customers are located in the US and Europe.
Its profit margins are incredibly high â both the gross profit margin and operating profit (EBIT) margin. In the FY25 result, the company reported its underlying EBIT margin was 74%. That means a significant majority of its new revenue is being turned into usable profit that can be put towards growth activities or boost the bottom line.
The company’s finances are rapidly improving â in FY25, the revenue jumped 31.9% to $213 million, and net profit after tax (NPAT) climbed 39.2% to $115.2 million.
It certainly still has a high price-earnings (P/E) ratio, but the halving of the share price has helped push the company’s valuation back to a much reasonable level.
Analysts still expect the company’s profitability to soar in the coming years, which bodes well for the future, with earnings per share (EPS) predicted to grow to $1.50 in FY26, putting it at 104x FY26’s forecast earnings, according to CommSec’s projection.
The forecasts show that EPS is expected to rise another 29.5% in FY27 to $1.94, followed by a further 29.9% in FY28.
Those numbers imply the Pro Medicus share price is valued at 62x FY28’s estimated earnings.
There are great signs for this top share from Australia because of how it continues to win new clients, sell more modules to existing clients, and sign renewed contracts at a higher level of revenue.
Why I think this is a good time to invest in Pro Medicus shares
Market fears have been elevated by AI concerns about technology businesses.
It’s hard to say exactly how things will play out with artificial intelligence. But Pro Medicus has a number of elements of economic moat to help against competitors, including AI. I’m thinking of IP, a great reputation, relationships with clients, years of honing the software to meet client needs, and the long-term contracts it has signed.
Plus, Pro Medicus can utilise AI to help boost its offering and operations, rather than new technology being a complete negative (if AI were to significantly advance in abilities from here).
Plus, I like that this top share from Australia has a strong balance sheet (no debt) and is investing in expanding into different ‘ologies’ to boost its growth potential.
While it’s still not cheap, I think this is a wonderful time to look at the Pro Medicus share price. Investors may have been waiting for a better price â this is a rare opportunity to buy a piece of the company after a huge decline. The last time this happened was the quick sell-off in tariffs last year.
The post A rare buying opportunity in 1 of Australia’s top shares? appeared first on The Motley Fool Australia.
Should you invest $1,000 in Pro Medicus right now?
Before you buy Pro Medicus shares, consider this:
Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Pro Medicus wasn’t one of them.
The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
And right now, Scott thinks there are 5 stocks that may be better buys…
* Returns as of 1 Jan 2026
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Motley Fool contributor Tristan Harrison has positions in Pro Medicus. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Pro Medicus. The Motley Fool Australia has recommended Pro Medicus. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.