The Pro Medicus Limited (ASX: PME) share price is edging lower with the market on Thursday.
In afternoon trade, the health imaging company's shares are down 0.5% to $43.11.
However, despite this, the Pro Medicus share price is still up a sizeable 23% since the start of the year.
Why is the Pro Medicus share price up 23% in 2021?
Investors have been fighting to get hold of the company's shares this year thanks to a solid half year result, a series of major new contract wins, and a bullish broker note.
In respect to its first half performance, for the six months ended 31 December, Pro Medicus reported a 7.8% increase in revenue to $31.6 million and a 29% (constant currency) increase in underlying profit before tax to $19.7 million.
Positively, since the end of the half, the company has signed two major new contracts. One was a $40 million 7-year deal with Intermountain Health and the other was a $31 million 7-year deal with a large University Health System.
Can Pro Medicus shares go higher?
The good news for investors is that one leading broker believes the Pro Medicus share price can still go higher from here.
That broker is Goldman Sachs. Last month its analysts upgraded the company's shares to a buy rating with a $53.80 price target.
Based on the current Pro Medicus share price, this implies potential upside of 25% over the next 12 months.
Why is Goldman so positive?
Goldman Sachs has been impressed with the way the company continues to win large contracts despite the difficult operating environment. The broker feels this leaves it well-positioned to grow its earnings at a rapid rate over the coming years.
And although the Pro Medicus share price trades at a premium to the market average, Goldman believes its growth profile justifies this.
It commented: "Whilst not cheap in absolute terms, our new estimates imply a +42% EBITDA CAGR (FY20-23E). In the context of ASX Healthcare, which trades at a 'multiple to growth' ratio of 2.9x, we do not see PME's ratio of 1.4x as demanding, particularly given its position as a technology leader in a market we believe is set for further technology upgrades, and a recurrent revenue model with inherent upside. We upgrade to Buy."
So, while Pro Medicus shares has been on fire in 2021, it appears as though they may still have further to run in the coming months.
