There is a small group of ASX shares that have performed really strongly for shareholders recently, delivering impressive operational results and market-beating share price growth.
However, whilst it's possible for some share prices to be good value, it is also possible that some excellent businesses to run ahead too hard.
So, after a strong run, are these two ASX shares worth looking at?
Pro Medicus Ltd (ASX: PME)
Pro Medicus describes itself as a leading healthcare informatics business. It provides a full range of medical imaging software and services to hospitals, imaging centres and healthcare groups globally. It offers a "clinically rich" and highly scalable cloud platform that can be used for both public and private environments.
The Pro Medicus share price has soared 84% over the last year.
This ASX share has been winning many large contracts with healthcare clients. One of the most recent wins was the 7-year, $40 million contract with Novant Health. Pro Medicus' Visage software will replace multiple picture archiving and communication systems (PACs).
Novant Health joined an increasing number of Visage clients that are opting for a fully cloud based solution.
Despite winning a number of contracts, Pro Medicus says that its pipeline remains strong in both North America and other regions. FY21 was a big year of growth – revenue rose 19.5% to $67.9 million, underlying profit before tax increased 41% to $42.6 million and the earnings before interest and tax (EBIT) margin improved to 63.2%.
Opinions are somewhat mixed on Pro Medicus. Morgans rates the ASX share as a hold, with a price target of $54.49.
However, Citi thinks Pro Medicus is a sell with a price target of just $45 – that's almost 30% lower than where it is now. It's concerned about cheaper competition in the future and that the market is being too bullish about the potential strength of the company's success.
Aussie Broadband Ltd (ASX: ABB)
This telecommunications business has also had a year strong year. Over the last 12 months it has gone up by 136%.
Aussie Broadband continues to see growth of its broadband user base.
At 30 September 2021 it had 445,780 broadband services. By 30 December 2021 it's expecting to have at least 482,495 services which includes expected organic net additions of at least 38,000. That's organic growth of at least 8.5% quarter on quarter.
A recent focus of both analysts and the company has been the expected acquisition of Over The Wire Holdings Ltd (ASX: OTW). This combination is predicted to deliver annual cost synergies of $8 million to $12 million within three years, ongoing capital expenditure savings and significant acceleration of capabilities of the group.
This proposed transaction, which will be funded by both cash and new shares, is expected to add to earnings per share (EPS) on both a pre and post synergy FY21 basis.
Ord Minnett is a fan of the deal, as it would grow the company's offering into other categories. It rates Aussie Broadband as a buy, with a price target of $5.91.
Credit Suisse's price target of $5.40 also offers potential double upside, but the broker is only 'neutral' on the business.
Ord Minnett thinks that the Aussie Broadband share price is valued at 34x FY23's estimated earnings.
