Veracyte (VCYT) Fell Despite Reporting Revenue Growth and Improved Profitability

Meridian Funds, managed by ArrowMark Partners, released its “Meridian Small Cap Growth Fund” first quarter 2025 investor letter.  A copy of the letter can be downloaded here. U.S. equities recorded their lowest quarterly performance since 2022, primarily due to uncertainty surrounding potential tariff policies. In this environment, the fund returned -12.21% (net) in the first quarter compared to the Russell 2000 Growth Index’s -11.12% return. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Meridian Small Cap Growth Fund highlighted stocks such as Veracyte, Inc. (NASDAQ:VCYT). Incorporated in 2006, Veracyte, Inc. (NASDAQ:VCYT) is a diagnostics company. The one-month return of Veracyte, Inc. (NASDAQ:VCYT) was -7.57%, and its shares gained 32.98% of their value over the last 52 weeks. On June 6, 2025, Veracyte, Inc. (NASDAQ:VCYT) stock closed at $27.46 per share, with a market capitalization of $2.151 billion.

Meridian Small Cap Growth Fund stated the following regarding Veracyte, Inc. (NASDAQ:VCYT) in its Q1 2025 investor letter:

“Veracyte, Inc. (NASDAQ:VCYT) is a diagnostics company that helps clinicians make more accurate diagnostic, prognostic, and treatment decisions for certain cancers. Its flagship commercial tests, Afirma and Decipher, continue to drive solid revenue growth and improving profitability. Although the company exceeded expectations on both the top and bottom line, shares declined following news that it may discontinue funding for its French subsidiary, which currently operates at an annual loss of approximately $20 million. We view the potential loss of revenue and minor delays in the pipeline as manageable, especially in light of improved profitability and strategic focus, and added to our position during the period.”

Veracyte (VCYT) Introduces AI-Powered Cancer Detection - Faster and More Accurate Than Ever!

A scientist in a laboratory coat looking at a DNA sequence on a monitor, symbolizing the power of genomic sequencing.

Veracyte, Inc. (NASDAQ:VCYT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 24 hedge fund portfolios held Veracyte, Inc. (NASDAQ:VCYT) at the end of the first quarter, which was 30 in the previous quarter. Veracyte, Inc. (NASDAQ:VCYT) generated revenue of $114.5 million in the first quarter of fiscal 2025, marking a 18% increase from last year’s comparable quarter.  While we acknowledge the potential of Veracyte, Inc. (NASDAQ:VCYT) 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 Veracyte, Inc. (NASDAQ:VCYT) and shared Artisan Small Cap 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.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

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