Here’s Why Progyny (PGNY) Rebounded in Q1

River Road Asset Management, an investment management company, released its “River Road Small Cap Value Fund” Q1 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, AMG River Road Small Cap Value Fund (Class N) returned -3.94% compared to -7.74% returns for the Russell 2000 Value Index. The fund returned 1.30% for the one year ended March 31, 2025, compared to the index return of -3.12%. Stocks declined in the first quarter due to diminishing growth expectations and uncertainty surrounding trade policies, which crumbled the post-election increase in business, consumer, and investor confidence. The remaining gains were subsequently erased following “Liberation Day.” For more information on the fund’s best picks in 2025, please check its top five holdings.

In its first-quarter 2025 investor letter, River Road Small Cap Value Fund highlighted stocks such as Progyny, Inc. (NASDAQ:PGNY). Progyny, Inc. (NASDAQ:PGNY) is a benefits management company that focuses on fertility and family-building benefits solutions. The one-month return of Progyny, Inc. (NASDAQ:PGNY) was 3.25%, and its shares lost 19.83% of their value over the last 52 weeks. On June 24, 2025, Progyny, Inc. (NASDAQ:PGNY) stock closed at $21.26 per share, with a market capitalization of $1.822 billion.

River Road Small Cap Value Fund stated the following regarding Progyny, Inc. (NASDAQ:PGNY) in its Q1 2025 investor letter:

“Another top contributor during the quarter was fertility benefits manager Progyny, Inc. (NASDAQ:PGNY). In late 2024, PGNY fell to record lows after the company lost its largest customer Amazon (AMZN), who accounted for ~12% of revenue. The portfolio initiated the position after the AMZN loss. The company subsequently reported strong Q4 2024 results, growing revenue 11% and earnings before interest, taxes, depreciation, and amortization (EBITDA) 10% year over year.”

A close up of a hand, fingers wrapped around a fertility specialist syringe.

Progyny, Inc. (NASDAQ:PGNY) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 29 hedge fund portfolios held Progyny, Inc. (NASDAQ:PGNY) at the end of the first quarter, which was 28 in the previous quarter. Progyny, Inc. (NASDAQ:PGNY) reported record revenue of $324 million in the first quarter of 2025, an increase of 16.5% from Q1 2024. While we acknowledge the potential of Progyny, Inc. (NASDAQ:PGNY) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered Progyny, Inc. (NASDAQ:PGNY) and shared Alger Weatherbie Specialized Growth Fund’s views on the company. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of PGNY as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.