The Pro Medicus Ltd (ASX: PME) share price has soared by 33% since 7 April 2025, which is one of the best performances in the S&P/ASX 200 Index (ASX: XJO) over the same time period.
The above chart shows what a strong rebound it has been for the healthcare technology business.
After such a large move in a short amount of time, it'd be understandable if some investors were worried about whether they'd missed their chance to invest in this leading business.
As a reminder, this company provides a full range of medical imaging software and services to hospitals, imaging centres, and healthcare groups worldwide.
Tariff volatility is over?
The large sell-off of the Pro Medicus share price was driven by the announcement of US tariffs on most goods from most countries.
President Trump then softened his stance by reducing the tariff rate to 10% on most countries, and US officials have suggested an interest in agreements with India and China.
At this stage, it seems the market fear about tariffs has subsided. However, it's certainly possible that a lack of a deal with China (if it doesn't eventuate) and other important trading partners could again worry investors.
But, it's worth noting that the Pro Medicus share price is still down by 20% from 19 February 2025, so investors can still get a better price than in the first couple of months of the year.
Is it too late to invest in Pro Medicus shares?
It's always possible to buy shares because they are transacted every trading day on the ASX.
Is the Pro Medicus share price justified?
No business is worth an infinite price, but the company does trade on a very high valuation. According to the forecast on Commsec, the Pro Medicus share price is valued at 171x FY26's estimated earnings and 125x FY27's estimated earnings.
While a triple-digit forward price-earnings (P/E) ratio is high, Pro Medicus is arguably the best business on the ASX.
It has an incredibly high operating profit (EBIT) margin for an operating business – it was 71.9% in the first half of FY25. This means that a very impressive amount of the new revenue is translating into net profit before tax. The business is also debt-free, so its cash balance is adding to profit with the interest income.
In the HY25 result, Pro Medicus' revenue grew by 31.1% to $97.2 million, and net profit jumped 42.7% to $51.7 million.
If the company can continue winning sizeable contracts in the northern hemisphere, renewing contracts at a higher fee rate, and growing profit rapidly, I think the Pro Medicus share price can comfortably outperform the ASX 200 over the long term.
