Ever since the market turned on them about 18 months ago, it's been a torrid time for technology and growth stocks.
High inflation and rising interest rates had investors fleeing from those ASX shares like they were a burning building.
However, there is one health tech stock from the S&P/ASX 200 Index (ASX: XJO) that's defied the odds and gained more than 84% since its June 2022 trough.
That's great for those punters lucky or skilful enough to have enjoyed that ride.
But the obvious question now is whether it's too late to buy in for the rest of us?
'A hot sector at present'
Pro Medicus Limited (ASX: PME) provides software and technology services to clients in the medical imaging industry.
The stock has rocketed in the past year off the back of a series of customer contract signings. The share price has gained more than 28% this year alone.
Like many other high-tech shares, Pro Medicus had always traded at high multiples to account for the future potential of the business.
But after the 12 months it's just had, the question is whether the valuation has now run up too high.
Shaw and Partners portfolio manager James Gerrish recently had some thoughts on whether he would buy Pro Medicus.
"Consensus estimates [have] revenue increasing by 22% in FY24, which does make it hard to justify the current estimated valuation of 135x," Gerrish said in a Market Matters Q&A.
"But the company develops and supplies proprietary software and IT solutions to large medical companies, i.e. a hot sector at present."
'The strong keep getting stronger'
Gerrish noted that only 9% of analysts that cover Pro Medicus currently rate it as a buy.
"[This] illustrates how the valuation is scaring off investors but, as we keep saying, 2023 has been characterised by 'the strong keep getting stronger'."
The client wins have been fantastic, but the future risk is on management execution, "specifically around growing the top line while also growing their margins as they continue to scale".
"Left field competition is also a risk factor that should always be considered — they operate in a dynamic space."
So with the high valuation and the execution risk, Gerrish's team "finds it difficult to start buying at current levels".
However, if they already owned it, Pro Medicus "looks great" to hold.
According to CMC Markets, three of five analysts consider the stock as a hold, while the other two recommend a sell.