The Pro Medicus Limited (ASX: PME) share price has started the week in the red.
In afternoon trade, the health imaging technology company's shares are down slightly to $45.50.
This means the Pro Medicus share price is now down 28% since the start of the year.
Is the Pro Medicus share price good value?
One leading broker that sees a lot of value in the Pro Medicus share price is Bell Potter.
According to a note, the broker has upgraded the company's shares to a buy rating with a trimmed price target of $55.00.
Based on the current Pro Medicus share price, this implies potential upside of 21% over the next 12 months.
What did the broker say?
Bell Potter made the move on valuation grounds. It believes the "recent route in high growth technology and healthcare stocks has created an attractive entry point for some high quality names including PME."
Particularly given its expectation for Pro Medicus to deliver double digit revenue and earnings growth later this month when it releases its half year results.
In addition, the broker is positive on the future and believes that "as imaging technology grows in complexity (and data size) the use case for the Visage technology continues to become more compelling."
And while Morgans has trimmed its price target, it feels this is appropriate following the recent market selloff and notes that it still offers major upside potential.
The broker explained: "Our target price is amended to $55.00 from $62.00. The target price is determined from a hybrid model of a DCF and a capitalised earnings model. We applied a 10% discount to the capitalisation multiple of revenues in order to adjust the target price. In our view this is appropriate following the recent market correction across both healthcare and information technology sectors."
"In our view the current market price represents an attractive entry point to this very high quality healthcare technology play. We upgrade our recommendation from Hold to Buy. Changes to earnings are not material," it concluded.
