Meridian Funds, managed by ArrowMark Partners, released its fourth-quarter 2025 investor letter for “Meridian Small Cap Growth Fund”. A copy of the letter can be downloaded here. U.S. equity markets navigated a quarter supported by optimism about potential monetary easing and caution regarding economic growth and valuations. Early gains were driven by strong AI-related earnings and the US Federal Reserve’s rate cut in October, which improved expectations for financial conditions. However, market sentiment cooled later in the quarter. Despite this moderation, the quarter contributed positively to robust annual results. Small caps delivered an annual return of 12.8% with a 2.2% Q4 gain. Value outperformed growth as per the Russell family of indices. In Q4 2025, The Meridian Small Cap Growth Fund returned 0.90% (net) compared to the Russell 2000 Growth Index’s 1.22% return. In addition, please check the Fund’s top five holdings to know its best picks in 2025.
In its fourth-quarter 2025 investor letter, Meridian Small Cap Growth Fund highlighted stocks such as Consensus Cloud Solutions, Inc. (NASDAQ:CCSI). Consensus Cloud Solutions, Inc. (NASDAQ:CCSI) is a leading information delivery services provider through a software-as-a-service platform. The one-month return of Consensus Cloud Solutions, Inc. (NASDAQ:CCSI) was 29.94%, and its shares gained 10.70% of their value over the last 52 weeks. On February 18, 2026, Consensus Cloud Solutions, Inc. (NASDAQ:CCSI) stock closed at $28.34 per share, with a market capitalization of $538.624 million.
Meridian Small Cap Growth Fund stated the following regarding Consensus Cloud Solutions, Inc. (NASDAQ:CCSI) in its fourth quarter 2025 investor letter:
“Consensus Cloud Solutions, Inc. (NASDAQ:CCSI) is a leading supplier of both secure data delivery for enterprise healthcare and cloud fax solutions to small office home office (SoHo) customers. Consensus has historically enjoyed a high percentage of recurring revenues, low churn in the enterprise segment, and high margins. During the quarter, however, the stock underperformed following a mixed earnings report and full year guidance that disrupted the positive momentum established earlier in the year. Currently trading at less than four times earnings and with a free cash flow yield of approximately 22%, we view the company as attractively valued. With EBITDA margins exceeding 50%, a return to sustainable growth could significantly enhance shareholder value in the future.”
Consensus Cloud Solutions, Inc. (NASDAQ:CCSI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 14 hedge fund portfolios held Consensus Cloud Solutions, Inc. (NASDAQ:CCSI) at the end of the third quarter, which was 15 in the previous quarter. In Q4 2025, Consensus Cloud Solutions, Inc. (NASDAQ:CCSI) recorded revenue of $87.1 million, marking an increase of an increase of $0.1 million or 0.1% over Q4 2024. While we acknowledge the risk and potential of Consensus Cloud Solutions, Inc. (NASDAQ:CCSI) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Consensus Cloud Solutions, Inc. (NASDAQ:CCSI) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Consensus Cloud Solutions, Inc. (NASDAQ:CCSI) and shared Meridian Small Cap Growth Fund’s views on the company last quarter. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
