At Pristine Gaze, our analysts continuously monitor the Australian stock market to identify promising investment opportunities. One ASX small-cap stock that has recently caught our attention is trading at $1.18. Despite a 17% decline in its share price over the past year, we believe this presents a compelling opportunity for investors.

After falling almost 17% over the past year, we see a lot of value at the current price. With solid business fundamentals, structural growth trends, and an attractive dividend yield, this stock could be one of the best stocks to buy for investors looking for exposure to the Australian healthcare sector.

Strong Growth in Key Business Segments

This company is one of Australia’s leading assisted reproduction providers, with additional operations in women’s imaging and day hospitals. The company has also expanded internationally, with operations in Malaysia, Singapore, and Indonesia.

At its 2024 annual general meeting, management provided insights into its growth trajectory:

• Australian Assisted Reproduction: Stimulated cycles increased by 2.6% year over year, including the Fertility North acquisition.
• Women’s Imaging: Scan volumes rose by 1.7% in FY25 through October 2024.
• International Expansion: Stimulated cycles grew by 20%, with KL Fertility up 21% and Singapore up 42%. The company also completed its expanded Singapore clinic in November 2024.

These figures highlight the company’s ability to grow despite economic headwinds, reinforcing its long-term investment appeal.

Structural Demand and Long-Term Potential

As industry experts, we recognize the underlying structural demand supporting this company’s business. The company anticipates continued growth in assisted reproduction services, driven by:

• Increasing demand for fertility treatments, genetic testing, and egg freezing.
• Advanced maternal age leading to higher fertility service utilization.
• Expanding patient segments, including the LGBTQIA+ community.

Additionally, with inflation easing in Australia, cost pressures on healthcare services may decrease, potentially enhancing the company’s profit margins in the medium term.

Financial Strength and Investor Appeal

This ASX small-cap stock has projected an underlying net profit after tax (NPAT) of $15.5 million to $16 million for FY25, representing growth of 3.3% to 6.6% year over year. Given its defensive healthcare positioning and consistent patient volume growth, we believe the stock is trading at an attractive valuation.

According to CommSec forecasts, this stock is currently valued at less than 15 times FY25 earnings, with a grossed-up dividend yield of approximately 7.25%, including franking credits. This combination of earnings growth and strong dividend yield makes it an appealing small-cap stock for investors seeking both stability and upside potential.

Get Exclusive Access to Our Free ASX Stock Report

This is just one of several high-potential ASX small-cap stocks we’re watching in 2025. If you’re looking for more top investment ideas, download our exclusive Free Report on the 5 Best ASX Stocks to Buy in February 2025 at freereport.pristinegaze.com.au.

At Pristine Gaze, we provide expert insights to help investors navigate the market with confidence. Don’t miss out on our latest stock recommendations—secure your free report today and stay ahead of the curve.

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