While investors chase the latest momentum trades, some proven ASX shares are being left behind — creating opportunities for those willing to look past short-term noise.
Two undervalued ASX shares that brokers believe fit that description today are Pro Medicus Ltd (ASX: PME) and Megaport Ltd (ASX: MP1).
Image source: Getty Images
Pro Medicus Ltd (ASX: PME)
Pro Medicus has built a reputation as one of the ASX's highest-quality healthcare technology companies. Its Visage imaging platform is used by leading hospitals and health systems, particularly in the US. Demand for advanced diagnostic software continues to grow.
The $19.5 billion company benefits from sticky, long-term contracts, high switching costs and recurring revenue. This is a powerful combination in any market environment.
There are risks. Growth expectations remain high, and any slowdown in hospital IT spending could impact short-term momentum. But with a clean balance sheet, strong cash generation and clear structural tailwinds from digital healthcare adoption, brokers remain confident the longer-term outlook remains intact.
The main concern for investors has long been valuation. The ASX share has often traded at a premium, reflecting its strong margins and reliable growth. However, in the past 6 months Pro Medicus has lost 42% in value, trading at $187.94 at the time of writing.
The recent weakness may offer a rare chance to buy a top-tier healthcare business at a heavily discounted price. Most analysts see Pro Medicus as a buy with an average 12-month price target of $330. This points to a massive 76% upside.
Megaport Ltd (ASX: MP1)
Megaport offers something different. It's a higher-risk, higher-reward technology story. The company provides on-demand, software-defined network services that allow businesses to connect quickly and flexibly to major cloud providers.
As cloud adoption accelerates globally, Megaport's addressable market continues to expand. Execution remains key. The ASX stock must prove it can convert growth into consistent profitability while managing competitive pressures in the cloud networking space.
Despite Megaport's expansion, the share price has lagged, dropping 18% over 6 months. Concerns around margins, investment requirements and earnings visibility have weighed on sentiment, leaving the ASX share trading well below levels seen in previous years.
Brokers are pointing increasingly to meaningful upside relative to current prices. Megaport is now viewed as an undervalued way to gain exposure to global digital infrastructure growth.
Most analysts rate the ASX share as a buy. The average 12-month price target stands at $17.67, which suggests a 48% upside. The most optimistic forecast is set at $21.70, a potential of 82% compared to the current share price of $11.91.
Foolish takeaway
Pro Medicus offers quality, stability and global reach, while Megaport provides leveraged growth at a discounted valuation.
For investors looking beyond today's headlines, both ASX shares may be worth a closer look.
