Model N (MODN) Fell as Fiscal 2024 Growth Rate Came in Below Street Expectations

Conestoga Capital Advisors, an asset management company, released its “Small Cap Strategy” third-quarter 2023 investor letter. A copy of the same can be downloaded here. The Small Cap Composite returned -6.72% net-of-fees in the third quarter, compared to the Russell 2000 Growth Index’s -7.32% return. The strategy’s outperformance was driven by positive stock selection effects, while sector allocation effects were modestly negative. In addition, please check the fund’s top five holdings to know its best picks in 2023.

Conestoga Small Cap Composite highlighted stocks like Model N, Inc. (NYSE:MODN) in the third quarter 2023 investor letter. Headquartered in San Mateo, California, Model N, Inc. (NYSE:MODN) provides revenue management cloud solutions for the life science and technology industries. On November 14, 2023, Model N, Inc. (NYSE:MODN) stock closed at $23.77 per share. One-month return of Model N, Inc. (NYSE:MODN) was 1.41%, and its shares lost 37.64% of their value over the last 52 weeks. Model N, Inc. (NYSE:MODN) has a market capitalization of $913.666 million.

Conestoga Small Cap Composite made the following comment about Model N, Inc. (NYSE:MODN) in its Q3 2023 investor letter:

“Model N, Inc. (NYSE:MODN): MODN reported a beat-and-raise fiscal third quarter as annual recurring revenue grew 28%. However, MODN’s initial fiscal 2024 growth rate came in below Street expectations, as many sell-side analysts had not correctly modeled the normalization that management has communicated regarding on-premises to cloud conversions. We believe net revenue retention and annual recurring revenue growth will drift towards management’s stated goal of 115% and 20%, respectively, in line with our expectations.”

Copyright: jirsak / 123RF Stock Photo

Model N, Inc. (NYSE:MODN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 19 hedge fund portfolios held Model N, Inc. (NYSE:MODN) at the end of second quarter which was 24 in the previous quarter.

We discussed Model N, Inc. (NYSE:MODN) in another article and shared Madison Small Cap Fund’s views on the company. In addition, please check out our hedge fund investor letters Q3 2023 page for more investor letters from hedge funds and other leading investors.

Suggested Articles:

• 10 Best Q3 Earnings Reports That Crushed Estimates
• Top 20 Most Valuable Restaurant Companies in the World
• 12 Best Cheap Growth Stocks To Buy Now

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