Ziff Davis (ZD) Slid on Earnings Miss and Poor Organic Growth

Meridian Funds, managed by ArrowMark Partners, released its “Meridian Growth Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here.  Uncertainty surrounding prospective tariff policies weighed on investor sentiment and risk assets in the quarter, leading U.S. equities to experience their weakest performance since 2022.  Value stocks outperformed their growth counterparts within the small-cap space. Against this backdrop, the fund returned -8.01% (net) compared to the Russell 2500 Growth Index’s -10.80% 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 Growth Fund highlighted stocks such as Ziff Davis, Inc. (NASDAQ:ZD). Ziff Davis, Inc. (NASDAQ:ZD) is a digital media and internet company. The one-month return of Ziff Davis, Inc. (NASDAQ:ZD) was 2.09%, and its shares lost 43.87% of their value over the last 52 weeks. On June 3, 2025, Ziff Davis, Inc. (NASDAQ:ZD) stock closed at $32.29 per share, with a market capitalization of $1.359 billion.

Meridian Growth Fund stated the following regarding Ziff Davis, Inc. (NASDAQ:ZD) in its Q1 2025 investor letter:

“Ziff Davis, Inc. (NASDAQ:ZD) operates in two primary segments: business cloud services and digital media. We continue to believe the company’s value lies in management’s demonstrated ability to generate strong returns on capital by acquiring and turning around underperforming businesses. The stock underperformed during the period due to a slight earnings miss and weaker organic growth. Looking ahead, we believe that a return to low single-digit organic growth and a continuation of strategic acquisitions could deliver future performance catalysts. We slightly trimmed our position during the period.”

Is Ziff Davis, Inc. (ZD) The Most Undervalued Stock With Smart Money Ratings?

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Ziff Davis, Inc. (NASDAQ:ZD) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 19 hedge fund portfolios held Ziff Davis, Inc. (NASDAQ:ZD) at the end of the first quarter, which was 14 in the previous quarter. Ziff Davis, Inc. (NASDAQ:ZD) reported revenue of $328.6 million in Q1 2025, up 4.5% from Q1 2024. While we acknowledge the potential of Ziff Davis, Inc. (NASDAQ:ZD) 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 Ziff Davis, Inc. (NASDAQ:ZD) and shared the list of most undervalued stocks with smart money ratings. In addition, please check out our hedge fund investor letters Q1 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.