The Pro Medicus Limited (ASX: PME) share price was a positive performer last week.
In response to the health imaging technology companyâs full year results, it shares recorded a weekly gain of 4.2%.
Can the Pro Medicus share price keep climbing?
One leading broker still sees value in the Pro Medicus share price at the current level.
According to a note out of Morgans, its analysts have retained their add rating and lifted their price target on the companyâs shares to $58.18.
Based on the current Pro Medicus share price of $54.17, this suggests potential upside of 7.4% for investors over the next 12 months.
What did the broker say?
Morgans was impressed with Pro Medicusâ full year results and particularly its margins. Thanks to further operating leverage, the latter came in well-ahead of expectations. It commented:
PME recorded another year of strong growth across all metrics with the key highlight being further EBIT margin expansion to 67% (+400 bps on the pcp) well above expectations, highlighting the operating leverage of the business.
The broker also highlights that the companyâs outlook remains as bright as ever. It said:
Outlook remains as strong as ever, highlighted by an increasing number of requests for tender proposals and more renewals from existing customers. The five-year forward contract value is up 31% to A$420m.
And while Morgans acknowledges that the Pro Medicus share price is not cheap at current levels, it believes the companyâs quality and outlook justifies this.
Itâs an impressive story, and one which we view with longevity. While currently fairly priced, we continue to view this as a strong long-term growth story which will continue to grow into its high multiple. Buyers on any weakness â itâs typically shortlived.
The post Pro Medicus share price tipped to rise amid ‘strong long-term growth story’ appeared first on The Motley Fool Australia.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Pro Medicus Ltd. The Motley Fool Australia has positions in and has recommended Pro Medicus Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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