Here’s Why OrthoPediatrics Corp. (KIDS) Drifted Lower in Q2

Conestoga Capital Advisors, an asset management company, released its second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The second quarter began with a historically poor start but gained momentum later as tariff fears subsided and market volatility dropped precipitously. Conestoga Micro Cap Composite appreciated 15.65% net-of-fees in the second quarter but underperformed the Russell Microcap Growth Index’s 20.92% return. In a highly volatile market led by high-beta and lower-quality stocks, the firm does not expect the fund to align with index performance. Please review the fund’s top 5 holdings to gain insight into their key selections for 2025.

In its second quarter 2025 investor letter, Conestoga Capital Advisors highlighted stocks such as OrthoPediatrics Corp. (NASDAQ:KIDS). Headquartered in Warsaw, Indiana, OrthoPediatrics Corp. (NASDAQ:KIDS) is a medical device company that provides anatomically appropriate implants, instruments, and specialized braces for children with orthopedic conditions. The one-month return of OrthoPediatrics Corp. (NASDAQ:KIDS) was 5.91%, and its shares lost 28.59% of their value over the last 52 weeks. On July 25, 2025, OrthoPediatrics Corp. (NASDAQ:KIDS) stock closed at $22.75 per share, with a market capitalization of $563.495 million.

Conestoga Capital Advisors stated the following regarding OrthoPediatrics Corp. (NASDAQ:KIDS) in its second quarter 2025 investor letter:

“OrthoPediatrics Corp. (NASDAQ:KIDS) is the first company to focus solely on orthopedic care for the pediatric market. After being a leader in 1Q, KIDS drifted modestly lower during 2Q. KIDS reported revenue growth for 1Q ahead of street expectations. The company also raised full-year revenue guidance. However, EBITDA margins came in weaker-than-expected for 1Q due to the timing of some expenses and slightly higher SG&A. Management reiterated their EBITDA guidance for the year.”

A cutting edge medical device in a sterile surgical setting, being operated by a skilled surgeon.

OrthoPediatrics Corp. (NASDAQ:KIDS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 12 hedge fund portfolios held OrthoPediatrics Corp. (NASDAQ:KIDS) at the end of the first quarter compared to 8 in the previous quarter. OrthoPediatrics Corp. (NASDAQ:KIDS) reported worldwide revenue of $52.4 million in Q1 2025, up 17% compared to the first quarter of 2024. While we acknowledge the risk and potential of OrthoPediatrics Corp. (NASDAQ:KIDS) 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 OrthoPediatrics Corp. (NASDAQ:KIDS) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered OrthoPediatrics Corp. (NASDAQ:KIDS) and shared Conestoga Capital Advisors’ views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q2 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.