Are these 2 high-flying ASX shares buys?

City Chic and Pro Medicus are high flyers. But are these ASX shares buys?

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A few ASX shares have produced extremely strong total shareholder returns. They're high-flyers – but could they be worth thinking about?

COVID-19 has been a very strange time. Some businesses have seen their share prices boom.

But are those strong ASX share performers still good potential investments?

City Chic Collective Ltd (ASX: CCX)

City Chic is one of the world's leading businesses when it comes to plus-size clothes and footwear for women. It operates through a number of different brands and businesses including City Chic, CCX, Avenue, Hips & Curves, Evans and Hips & Curves.

Over the last year, the City Chic share price has gone up by 55% – and a year ago wasn't from the bottom of the COVID-19 crash.

City Chic reported that it is seeing growth despite all the impacts of COVID-19. In the first six months of FY21, it saw comparable sales growth of 20.8% excluding Victorian store closures, or 12.7% including store closures.

Half-year sales revenue went up 13.5% to $119 million. Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) increased 21.8%, with the EBITDA margin rising from 18.2% to 19.6%.

'Normalised operating cashflow' increased 25.7% to $21.5 million. Statutory net profit grew 24.8% to $13.1 million.

The ASX share is no longer just a bricks and mortar network in Australia. Around 45% of sales were from the northern hemisphere in HY21 and the business said overall online sales grew by 42% (representing 73% of total sales).  

Despite that profit growth, the broker Citi thinks that the City Chic share price is valued at 53x FY21's estimated earnings.

Citi currently has a neutral rating on City Chic because of the valuation, though the e-commerce exposure is a good factor of the business. The price target is $4.30.

The broker is expecting more profit growth into FY22. On Citi's numbers, the City Chic share price is valued at 33x FY22's estimated earnings.

Pro Medicus Ltd (ASX: PME)

Pro Medicus describes itself as a leading healthcare informatics company. It provides a full range of medical imaging software and services to hospitals, imaging centres and health care groups around the world. It provides a highly scalable platform that can be deployed in both public and private cloud environments.

Over the last year the Pro Medicus share price has risen by around 130%.

Revenue and profit didn't rise quite as much as that in the last result – HY21 revenue grew 7.8% and net profit grew 12.4% to $13.5 million. The ASX share's underlying profit before tax went up 25.9% to $18.76 million. The strengthening Australian dollar dampened the growth figures in Australian dollar terms.

In the first half of FY21, Pro Medicus reported one of the highest earnings before interest and tax (EBIT) margins on the ASX – 59%. The company is debt free and has been winning large contracts in both North America and Europe.

One of its latest wins was the 8-year, $14 million deal with The University of Vermont Health Network, further extending its US academic institution footprint.

Morgans doesn't think the Pro Medicus share price can stay this high, as it may have been boosted by shorters exiting their positions. It has a sell rating on the ASX share.

The broker has a price target of $49.69 on Pro Medicus. At the current Pro Medicus share price, Morgans predicts it's valued at 134x FY22's estimated earnings.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Pro Medicus Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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