Shares in Web Travel Group Ltd (ASX: WEB) have been gyrating wildly over the past week, with double-digit falls on Friday followed up with double-digit gains on Monday, all over a release to the market that the company didn’t see as material.

The company issued a brief market release on Friday saying its Spanish subsidiary was being audited, which sent its shares plunging, even prompting a ‘please explain’ letter from the ASX itself.

The company responded, saying it did not believe the announcement was market sensitive and that the audit had been proactively announced to the market following coverage in Spanish media.

Web Travel Group shares have since made up much of the ground lost, but are still shy of the $4.20 they were changing hands for on Thursday, and are trading up 5.3% on Tuesday at $3.69.

So are the shares cheap at current levels?

I’ve looked at reports from three different brokers, and the consensus is that yes, at these levels, Web Travel shares are a buy.

UBS has the most bullish share price target on the stock of $6.15.

In a note to clients sent out this week, the team seemed unfazed by the Spanish tax audit, saying the company said they had been audited in Spain in 2024, and management “emphasised they consider this audit immaterial” on an investor call this week.

The UBS team went on to say:

Minimal details given around underlying tax audit, however conference call comments should alleviate some investor concern. Pleasingly, the business is continuing to outperform the underlying travel market (and in line with expectations), which we think will be well received.

UBS is also forecasting a large dividend yield of 8.2% for Web Travel, with an anticipated total return of more than 100%.

The team at Jarden also has a bullish price target of $5.70 per share.

The Jarden team said the company gave “a reassuring update on both trading and the immateriality of the Spanish tax audit” on the investor call.

As well as dismissing the audit as immaterial, the Jarden team said the company reaffirmed its FY26 guidance of $147-$155 million, and also reaffirmed double-digit booking growth.

The Jarden team also addressed the potential impact of AI on the business.

Web is a unique global business with a large total addressable market, within which it is growing share (>3x market) and return on invested capital. The key near-term debate will be the impact of AI and notably around disintermediation risk and AI agents ability to automate rate optimisation. However, we believe bed-banks will remain an important source in aggregating this process, with Web already far advanced with its own Ai pricing model driving conversion uplifts.

Finally, Morgan Stanley has a $4.40 price target on Web Travel shares.

The post The brokers are unanimous, this ASX travel stock is a buy appeared first on The Motley Fool Australia.

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• Why is the Web Travel share price crashing 41% on Friday?

Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Steadfast Group Ltd (ASX: SDF) shares are plummeting today. At the time of writing, the shares have dropped 11.37% to $4.40 a piece. The decline means the shares are now down 17.2% year to date and 22.45% from this time last year.

It’s been a tough few months for the insurance broker network company. Its shares crashed over 21% in October following news that its Managing Director had temporarily stepped aside amid an investigation into a workplace complaint against him.

On the 30th of October, Steadfast shares were placed in a trading halt with the company saying at the time the halt was necessary, “as Steadfast investigates a workplace complaint against a senior executive”. The company immediately appointed Tim Mathieson, CEO Australasian Broking, to the role of acting CEO.

Steadfast shares struggled to recover the losses and ended 2025 just over 10% lower. The declines have picked up pace in 2026 so far.

What is causing Steadfast shares to tumble?

There isn’t any price-sensitive news out of the insurance company to explain today’s sell-off. 

It looks more likely that today’s sharp decline is a perfect storm of events that are leading investors to sell up.

Broader market sentiment put insurance stocks under pressure in late 2025, and this has continued through to 2026.

At the same time, Steadfast’s leadership and reputational headwinds continue to weigh on investor confidence, and uncertainty about the company’s upcoming financial results announcement could also be causing jitters.

Steadfast is expected to release its results for the first half of FY26 later this month on the 25th of February.

In August, Steadfast released guidance for the current financial year, saying it expected underlying net profit to come in at $315 to $325 million, based on achieving a 3% to 5% increase in the pricing of insurance premiums in Australia.

Can Steadfast shares recover this year?

Despite the headwinds and dwindling share price, it looks like analysts are very optimistic that Steadfast can turn itself around this year.

TradingView data shows that eight out of 11 analysts currently have a buy or strong buy rating on Steadfast shares. Another three analysts have a hold rating on the stock.

The annual estimates are high, too. The maximum target price over the next 12 months is $6.90 a piece, which implies a potential 55.76% upside ahead, at the time of writing.

Even the minimum target price represents a decent opportunity for investors. Some expect the shares could climb to $5 a piece this year, which would still imply a 12.87% gain from the current trading price.

The post Why are Steadfast shares crashing 11% today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies 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 Steadfast Group. The Motley Fool Australia has positions in and has recommended Steadfast Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The S&P/ASX 200 Index (ASX: XJO) is on form again on Tuesday and pushing higher. In afternoon trade, the benchmark index is up 0.25% to 8,891.8 points.

Four ASX shares that are rising more than most today are listed below. Here’s why they are climbing:

Elevra Lithium Ltd (ASX: ELV)

The Elevra Lithium share price is up 6% to $7.60. This morning, this lithium miner announced a non-binding agreement to supply Mangrove Lithium with spodumene concentrate produced at North American Lithium. A binding definitive agreement rests on a final investment decision by Mangrove Lithium for construction of a lithium conversion facility and the agreement on the final terms of the deal. If all goes ahead, Elevra would supply 140,000 tonnes per year of spodumene concentrate to Mangrove Lithium at market related prices, subject to a floor and ceiling price.

Pro Medicus Ltd (ASX: PME)

The Pro Medicus share price is up almost 2% to $163.90. This appears to have been driven by a broker note out of Morgans this morning. According to the note, the broker has upgraded the health imaging technology company’s shares to a buy rating with a $290.00 price target. It said: “Pro Medicus provides that infrastructure, so, in many ways the acceleration toward AI potentially makes its business case more compelling as a product versus peers – at least in the medium term.”

Sims Ltd (ASX: SGM)

The Sims share price is up 3% to $21.26. After the market close on Monday, this scrap metal company revealed that it has entered into an agreement to purchase assets of TCT Trading for US$66.5 million. It advised that this is seen as a key component to consolidating its Houston operations and significantly reducing its operating cost base. The company has also entered into an agreement to sell its nearby Mayo Shell property in Houston.

Treasury Wine Estates Ltd (ASX: TWE)

The Treasury Wine share price is up 6% to $5.48. This follows news that the wine giant has reached a settlement with Republic National Distributing Company (RNDC) in California. This follows RNDC’s decision to exit the California market last year. Treasury Wine will repurchase its Treasury Americas portfolio inventory held by RNDC in California at original sale value. In addition, the company advised that it now expects first-half EBITS of approximately $236 million. This compares favourably to its previous guidance range of $225 million to $235 million.

The post Why Elevra Lithium, Pro Medicus, Sims, and Treasury Wine shares are roaring higher appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Pro Medicus and Treasury Wine Estates. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Treasury Wine Estates. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Pro Medicus. The Motley Fool Australia has positions in and has recommended Treasury Wine Estates. 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.

Amplitude Energy Ltd (ASX: AEL) shares are having a day to forget on Tuesday.

In morning trade, the ASX 300 stock is down 27% to $2.35.

Why is this ASX 300 stock sinking today?

Investors have been selling this energy company’s shares today following the release of exploration results.

According to the release, Amplitude Energy has provided an update on drilling operations at the Elanora-1 exploration well in the Offshore Otway Basin, Victoria.

It notes that Elanora-1 is an exploration well located in permit VIC/L24 within Commonwealth waters, approximately 6km south-west from a tie-in point in the existing Casino, Henry, Netherby (CHN) pipeline.

The ASX 300 stock is the operator and a 50% interest holder in VIC/L24 with O.G. Energy holding the remaining 50% interest.

What were the results?

This morning, Amplitude Energy revealed that the Elanora-1 eight and a half-inch hole section penetrated the primary Waarre A reservoir target and reached the planned total depth (TD) of 1,857 metres TVDSS on 10 February. This was achieved safely and without material incidents.

TD was reached in 15 days from spud date, well ahead of budgeted schedule.

Unfortunately, preliminary drilling and logging data recorded no elevated gas readings in the primary target Waarre A reservoir (intersected at 1,766 metres TVDSS). As a result, the reservoir is interpreted to be water-bearing.

What now?

The ASX 300 stock revealed that Elanora-1 will now be plugged and a sidetrack into the Isabella prospect will be drilled as planned. This is expected to take approximately 14-18 further days. Isabella lies immediately adjacent to Elanora, also in the VIC/L24 permit.

It notes that in the event of success in the sidetrack, evaluation of the discovery through Logging While Drilling (LWD) will be conducted immediately to assess the gas composition and quality of the reservoir.

The sidetrack is planned to be cased and completed with a sub-sea tree upon success, incorporating a flow test, and then suspended ready for development as part of the East Coast Supply Project (ECSP).

The company’s managing director and CEO, Jane Norman, commented:

While the result at Elanora is disappointing we continue the ECSP campaign with the Isabella prospect, targeting a separate reservoir to that tested by Elanora. As previously communicated, on success Isabella is intended to be a producing field for the ECSP, while evaluation of Elanora was intended to inform our longer-term Otway Basin exploration and development plans. The result at Elanora, which was targeting Waarre A sands, does not impact our view of the probability of success of Waarre C sands targets such as Isabella, Juliet or Nestor.

The post Why is this ASX 300 stock crashing 27% today? 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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Myer. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Wisetech Global Ltd (ASX: WTC) is another local technology stock caught up in the recent sector shakeout, with investors apparently nervous about the impact of AI on future earnings across the board.

The company’s shares are currently trading at $49.28 and are well down on the $127.39 they were fetching around this time last year.

So are the shares, which are trading not far off their 12-month lows, a bargain?

AI a blessing, not a curse

The team at Macquarie seem to think so, this week issuing a research note to their clients with a bullish share price target of $94, arguing that the company has the “most defensible” position in the Australian technology sector, and that it stands to benefit from AI rather than suffer.

One of the key elements in the company’s favour, the Macquarie team says, is that Wisetech’s CargoWise offering is “an entrenched vertical operating system with proprietary data, reinforced by huge R&D scale”, not just a run-of-the-mill software as a service business.

The Macquarie team said, “We think WiseTech (WTC) has a defensible position for perceived future AI competition”, and said there was the potential for the company to grow through acquisition as it has done in the past.

The Macquarie team added:

Execution risks are commensurate with the size and deliverability of a massive market opportunity, which is fully priced. Conversely, AI upside is not priced, and we see scope for earnings per share beats in 1H26 despite lower visibility.

Jarden analysts released their own report into Wisetech in mid-January, and while they’re not so bullish on the stock, they still believe it can increase handily with a price target of $74.

The Jarden team, in a preview of the company’s half-year results, noted that Wisetech has a history of surprising the market, both positively and negatively, but is forecasting revenue growth of 70% to US$649 million for the half.

Things that could drive better-than-expected results included a faster rollout of the CargoWise product to existing customers and new contract wins.

Jarden said they believed Wisetech’s operating cost guidance could also be conservative.

Wisetech itself last reaffirmed its guidance at its annual general meeting in November, with revenue expected to be US$1.39 to US$1.44 billion, which would be a 79% to 85% increase over the previous year.   

Wisetech is scheduled to release its half-year results on 25 February.

The company was valued at $16.56 billion at the close of trade on Monday.

The post How undervalued are Wisetech shares? Two brokers have their say appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has positions in WiseTech Global. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group and WiseTech Global. The Motley Fool Australia has positions in and has recommended Macquarie Group and WiseTech Global. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Amotiv Ltd (ASX: AOV) share price is little changed today at $8.44 after the company released its half-year results.

While the numbers show steady progress, the market response indicates investors expected a better result.

The Amotiv share price is now down around 6% so far this year, with today’s result largely in line with expectations.

Let’s dive right in.

A steady result, but no fireworks

For the six months ended 31 December 2025, Amotiv reported higher revenue and profit compared to the same period last year.

Group revenue came in at just over $520 million, supported by solid demand across several parts of the business and contributions from recent acquisitions. Operating profit also increased, while net profit attributable to shareholders rose to around $46 million.

On the surface, it looks like a healthy result. However, once one-off items and acquisition-related costs are stripped out, the underlying profit growth was modest.

Margins still under pressure

A key takeaway from the update was that margins remain under pressure.

Amotiv continues to face higher costs across its supply chain, while pricing increases have yet to fully flow through. Some overseas operations run at lower margins than the core Australian business, which diluted overall profitability during the half.

The company also booked a small provision linked to a customer in the recreational vehicle segment. While not material for the group, it is a reminder that some parts of the market are still struggling.

Management said it is working through pricing actions and cost controls, which should help improve margins in the second half.

Balance sheet and cash flow remain solid

A key positive from the result is Amotiv’s cash generation.

The company delivered strong operating cash flow during the half, with cash conversion improving to around 92%. That supports the balance sheet and gives management flexibility to invest in the business while continuing to return cash to shareholders.

Amotiv also declared a fully-franked interim dividend of 20 cents per share, up 8.1% on the prior corresponding period.

What does it mean for investors

Overall, Amotiv produced a steady result for the first half.

Revenue and profit moved in the right direction, and the business remains well-positioned in the automotive aftermarket space. However, margin pressure and softer trading conditions are still holding back stronger earnings growth.

At $8.44, the share price shows investors are waiting for clearer signs of improvement. That will depend on margins lifting in the second half.

The post Is this why Amotiv shares are stuck in neutral after today’s results? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Macquarie Group Ltd (ASX: MQG) shares are marching higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) diversified financial stock closed yesterday trading for $212.91. As we head into the Tuesday lunch hour, shares are changing hands for $215.37 each, up 1.2%, having posted earlier morning gains of 4%.

For some context, the ASX 200 is up 0.3% at this same.

Today’s outperformance follows the release of a trading update.

Here’s what we know.

Macquarie shares lift on solid quarter

Macquarie shares are outperforming following the release of the company’s December quarter update for the financial year ending 31 March 2026 (Q3 FY 2026).

Digging into the company’s operating segments, Macquarie Asset Management (MAM) reported assets under management (AUM) of $736.1 billion at 31 December. That’s up 3% quarter on quarter. Public Investments AUM performed particularly well, up 5% from Q2, driven by inflows in fixed income funds and favourable market movements. Private Markets AUM increased 1%.

Macquarie’s Banking and Financial Services (BFS) segment had total deposits of $204.5 billion at 31 December, up 6% quarter on quarter. The BFS home loan portfolio increased by 7% to $172.2 billion. The business banking loan portfolio increased 1% to $17.5 billion, while funds on platform slipped 1% from Q2 to $164.6 billion.

And Macquarie shares could be getting an added boost with the company’s Commodities and Global Markets (CGM) delivering “improved contributions” across both Commodities and Asset Finance compared to Q2. The Financial Markets contribution was broadly in line with the prior quarter.

In other core financial metrics, asset realisations and higher net income from the private credit portfolio saw an uptick in Macquarie Capital’s investment-related income over Q3.

Macquarie also highlighted that its financial position “comfortably exceeds” APRA’s Basel III regulatory requirements.

Macquarie reported a capital surplus of $7.5 billion at 31 December, which was down from $7.6 billion at 30 September.

What’s next for the ASX 200 financial stock?

Looking at what could impact Macquarie shares in the months ahead, the company reported that it continues to “maintain a cautious stance”. The company said its conservative approach to capital, funding, and liquidity positions it well to respond to the current environment.

Macquarie CEO Shemara Wikramanayake noted:

Macquarie remains well-positioned to deliver superior performance in the medium term with established, diverse income streams; deep expertise across diverse sectors in major markets with structural growth tailwinds; patient adjacent growth across new products and new markets; ongoing investment in our operating platform; a strong and conservative balance sheet; and a proven risk management framework and culture.

The post Macquarie shares taking off today as assets under management top $736 billion appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben 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 Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

While the silver price has taken a bit of a beating recently, it’s still up by well over 100% over 12 months, posing the question: where to invest to take advantage of the still-robust silver price?

There aren’t many silver producers on the ASX, but one soon-to-be producer is worth a look and could deliver strong returns, according to the team at Shaw & Partners.

Transition to producer status

They have run the ruler over Boab Metals Ltd (ASX: BML), which they believe has been a bit overlooked by the market since making a final investment decision (FID) over its Sorby Hills silver and lead project in Western Australia in mid-December.

The company said at the time it had $110 million in equity funding and a $236 million debt facility on hand to fund the construction of the project, and it was aiming to award the mining contract in the second quarter of this year.

The company said at the time:

Boab will provide updates early in the new year on a series of exciting activities across construction and project optimisation. With strong news flow planned throughout 2026, shareholders can expect a clear line of sight on progress as Boab advances its transition to a base and precious metals producer, offering multiple potential value catalysts in the months ahead. First concentrate production is scheduled for H2 2027.

Shaw has run the numbers on Boab and believes it is undervalued at the current share price.

As the Shaw team said in a note to clients this week:

On our modelling, every US$10/oz on the silver price is worth 40 cents per share to the Boab share price and at today’s spot silver price of US$80/oz, Boab is worth $1.53 per share. Despite the rally in silver, the Boab share price is only up from 41 cents to 53 cents since FID as the market digests the recent capital raises. This is creating an excellent opportunity for investors looking for silver exposure with heightened liquidity and an under-valued share price.

The Sorby Hills mine is expected to produce 2.2 million ounces of silver per year, and the Shaw team has estimated it will generate about $295 million in cash flow per year.

Shaw’s share price target for Boab shares is $1.70, up from $1.08 previously.

Boab shares were changing hands for just 54.5 cents on Tuesday morning. The company was valued at $302.3 million at the close of trade on Monday.

The post This silver stock could triple in 12 months one broker says appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Electro Optic Systems Holdings Ltd (ASX: EOS) shares have returned from a trading halt and are sharply lower in early trade on Tuesday.

In morning trade, the ASX defence stock was down as much as 16% to $5.05 before staging a recovery of sorts.

Why are EOS shares crashing?

Investors have been selling the defence technology company’s shares this morning after it issued a lengthy response to allegations made by US-based short seller Grizzly Research.

Last week, Grizzly Research published a report alleging various issues at EOS. However, Grizzly has disclosed that it holds a short position in EOS shares, meaning it stands to benefit financially if the share price falls.

In response, EOS requested a trading halt and has now released a detailed statement rejecting what it describes as the report’s “misleading, manipulatory and pejorative” conclusions. The company also revealed it has instructed legal advisers in Australia and Germany to consider potential legal action.

Even so, the mere presence of a high-profile short seller report is often enough to rattle markets, particularly after a strong run in a company’s share price.

The EOS response

The company’s response was long, but the main points can be boiled down into a few key themes.

Firstly, EOS strongly disputes the suggestion that recent share price gains were artificial or unsupported. It points to a surge in global defence spending, increased demand for counter-drone technology, and a sharp rise in its unconditional order book, which grew from $136 million at the end of 2024 to $459 million at the end of 2025. It said:

EOS is strongly of the view that the increased intake of unconditional orders over the course of 2025 is one of the key drivers of the share price appreciation recently observed.

South Korean order

Second, EOS addressed concerns around a conditional Korean high-energy laser contract worth US$80 million. The company stressed that the contract was clearly disclosed as conditional, it was not included in the $459 million secured order book, and EOS has not incurred significant costs while conditions remain unmet.

EOS said it continues to work with its Korean partner, Goldrone, but reiterated that the contract may or may not ultimately become unconditional. It is possible that some investors were treating this contract win as a certainty, but these comments have created significant uncertainty with the contract which could be weighing on EOS shares today.

MARSS acquisition

The company also defended its acquisition of MARSS, which is a counter-drone software business.

EOS rejected claims that MARSS had minimal revenue, saying Grizzly’s analysis ignored revenue generated outside the UK. According to EOS, MARSS generated approximately 243 million euros of revenue between 2020 and 2025 across multiple jurisdictions.

Finally, EOS pushed back on claims relating to its balance sheet. It said the sale of its EM Solutions business was part of a strategic refocus, not a forced move to pay down debt, and highlighted that it currently holds over $100 million in cash with no drawn debt.

Despite today’s and recent weakness, EOS shares are up approximately 300% since this time last year.

The post EOS shares crash 16% on scathing short seller report appeared first on The Motley Fool Australia.

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• What is driving today’s sell-off in ASX defence tech stocks?

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 Electro Optic Systems. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Shares in Pro Medicus Ltd (ASX: PME) have more than halved over the past year amid the broader technology sell-off.

The company hasn’t had any news of note to release since December 1, when it announced a $25 million, seven-year contract in the US, so it’s not like there is any bad company-specific news driving the share price lower.

Caught in the tech crash

The analysts at Morgans have had a look at the company and believe that it “has been sold off heavily as investors increasingly worry that AI could structurally erode the economics an commoditise premium imaging SaaS (software as a service) platforms”

They added, “For Pro Medicus, that feels misunderstood”.

That said, they believe AI has a role to play in radiology, the field in which Pro Medicus operates.

As they said in a note to clients this week:

Global imaging demand and in particular CT and MRI utilisation has grown faster than radiologist supply for more than a decade. The size and complexity of these modalities create workflow bottlenecks, long reporting queues, radiologist burnout, and pressure for cost and efficiency gains. AI’s core value in healthcare is efficiency, speeding up workflows through automation, consistency, and smarter prioritisation. It already tackles tasks such as image‑quality checks, auto‑labelling, and even pre‑reading clear negatives or obvious cases. These sit around the diagnostic moment but don’t replace the need for radiology itself, nor the enterprise workflows, data routing, and high‑performance visualisation that underpin it.

But Morgans added that while AI will no doubt become a powerful tool in healthcare, it still needs infrastructure to operate, which is where Pro Medicus comes in, with its proprietary product suite that enables the compression and decompression of large radiology files.

As the Morgans team said:

Pro Medicus provides that infrastructure, so, in many ways the acceleration toward AI potentially makes its business case more compelling as a product versus peers – at least in the medium term.

Company has a wide moat

Morgans says while there are already start-ups pitching end to end imaging solutions, they’re “tiny, unproven and not enterprise ready”.

They also note that the buyers in the field tend to be risk-averse with long testing and procurement cycles.

The Morgans team said:

So, is there risk ahead? There is. There always has been. But we don’t see it as existential, or likely a material threat in the next 5 to 10 years. Even so, Pro Medicus should have renewed and signed even more large contracts, locking in the next 7-10 years of guaranteed minimum revenues. Growth is far from done.

Morgans has a 12-month price target of $290 on Pro Medicus shares, compared with $161.17 currently, which would represent a gain of 79.9% if achieved.

Pro Medicus will release its first-half results on Thursday, February 12.

The post Let’s see why this broker thinks Pro Medicus shares could fly appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England 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.