The Pro Medicus Limited (ASX: PME) share price has been an outstanding performer in 2021.
Since the start of the year, the health imaging technology company's shares have raced 61% higher.
This means the Pro Medicus share price is now up a remarkable 110% since this time last year.
Can the Pro Medicus share price keep on rising?
Unfortunately, one leading broker is calling a top on the rampant Pro Medicus share price run.
According to a note out of Bell Potter from late last week, the broker has retained its hold rating with an improved price target of $49.00.
Based on the latest Pro Medicus share price of $57.00, this implies potential downside of 14% over the next 12 months.
What did the broker say?
Bell Potter recognises Pro Medicus as a quality company and notes that the moat around its earnings continues to widen as the use of sophisticated imaging technology continues to expand.
However, the "eye watering multiples" its shares trade on means the broker doesn't see enough value right now to consider it a buy.
It commented: "We have a positive view of the company, although maintain our Hold rating based on valuation."
Positioned for strong long term growth
Although Bell Potter may be waiting for a pullback before rating the Pro Medicus share price as a buy, it has spoken very positively about its long term growth prospects. This is due to its relatively modest market share at present.
It explained: "Despite encouraging progress with new business wins, we estimate PME's share of market at 3% to 5% (in the market for radiology image viewing), hence there remains a vast horizon of potential new business opportunity, all of which may reasonably be expected to come to market over the next 2 decades."
"Increasingly we expect new business will come from second and third tier healthcare systems operating below the pre-eminent Institutional level healthcare systems (i.e. Northwestern, UCLA, Yale). The contract wins announced to the market over the LTM included three such deals (Medstar, Intermountain & Vermont). While these clients maintain a lower profile, their average deal size remains highly attractive business. The Intermountain Healthcare deal (January 2021) was one of the largest deals in PME's history ($40m over 7 years, covering 24 hospitals and 200 outpatient clinics)," the broker added.
