Pro Medicus Ltd (ASX: PME) shares are slipping today.
Shares in the S&P/ASX 200 Index (ASX: XJO) health imaging company closed yesterday trading for $138.12. In early afternoon trade on Tuesday, shares are swapping hands for $137.07 each, down 0.8%.
For some context, the ASX 200 is down 0.5% at this same time.
As you're likely aware, Pro Medicus shares have come under heavy pressure since last July.
Indeed, on 17 July the stock notched an all-time closing high of $330.48 a share. The share price has since crashed 58.5% from that high water mark.
But it's not just Pro Medicus that has suffered.
While the ASX 200 is up 0.8% since 17 July, the S&P/ASX All Technology Index (ASX: XTX) has tumbled 32.4% over this period as investors sold off a lot of Software as a Service (SaaS) stocks.
In what you may have heard called the SaaSpocalypse, Pro Medicus and many other stocks dependent on their proprietary software have gotten hit amid investors' concerns that artificial intelligence, or AI, might replace the services these companies provide.
But following the past months' steep selloff, Medallion Financial Group's Stuart Bromley now sees "a rare buying opportunity" (courtesy of The Bull).
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Should you buy Pro Medicus shares today?
"The company provides medical imaging software and services to hospitals and healthcare groups across the world," Bromley said.
Citing the first reason he's bullish on Pro Medicus shares, Bromley noted, "The share price is down significantly in the past year on fears of artificial intelligence impacting the business."
But that sell-off doesn't reflect the ASX 200 healthcare stock's ongoing contract wins. Which is the second reason you might want to buy the stock today.
According to Bromley:
The company continues winning large and long-term contracts. PME recently renewed a five-year, $37 million contract with Northwestern Medicine based in Chicago. The renewal comes with increased minimums and a higher fee per transaction.
Pro Medicus announced that $37 million contract renewal on 13 April.
Commenting on the deal on the day, Pro Medicus CEO Sam Hupert said:
We are extremely pleased that in addition to committing to a second five-year term at an increased fee per exam, Northwestern Medicine have also committed to an increase in their minimums reflecting the growth in their exam volumes since standardising on our platform five years ago.
Summing up his buy recommendation on Pro Medicus shares, Medallion Financial Group's Bromley concluded, "In our view, PME presents a rare chance to buy a world class software play at a significant discount."
