There are a lot of options for growth investors to choose from on the Australian share market.
But arguably one of the best ASX growth stocks could be Pro Medicus Limited (ASX: PME).
What is Pro Medicus?
Pro Medicus is a leading healthcare informatics company. It provides a full range of medical imaging software and services to hospitals, imaging centres, and health care groups worldwide.
The company notes that its Visage 7 suite of products are the foundation of an ultra-fast, clinically rich, and highly scalable platform that can seamlessly be implemented in both public and private cloud environments. It also offers a leading suite of RIS, PACS, artificial intelligence (AI), and e-health solutions, which it believes constitutes one of the most comprehensive end-to-end offerings in healthcare imaging.
Why could it be the ultimate ASX growth stock to buy with $1,000?
Goldman Sachs believes that Pro Medicus is one of Australia's best global growth companies.
There are four key reasons for this and why it believes investors should be snapping up its shares. It explains:
Key reasons for our positive view: (1) We believe the adoption of Visage is a matter of when, not if, for many US healthcare institutions including academics, IDNs and smaller, independent clinics, with our Visage terminal market share expectations >30% amid increasing competition;
(2) As a top 5 US IDN, we expect the Trinity contract to drive a network effect across this cohort which represent >40% of PME's core TAM;
It then adds:
(3) We see a significant opportunity to expand customer spend, through existing products (i.e. Cardiology, AI) and new white space products (i.e. other 'ologies'). Amid an intensely competitive AI healthcare market, we believe PME stands out to succeed given its unique partnership with industry KOLs, launching four new solutions with academics at RSNA 2024; and
(4) PME has a track record of delivering profitable growth with best in class margins, including >70% under the 'Rule of 40' which we believe is sustainable through the cycle.
Buy rating
According to the note, the broker has a buy rating and $278.00 price target on its shares.
Based on where the ASX growth stock is currently trading, this implies potential upside of approximately 12% for investors over the next 12 months.
Though, it is worth noting that Goldman regularly lifts its price target for Pro Medicus, so don't be surprised if its valuation is increased again later this year if the company delivers another strong result and announces new contract wins.
