Softer Demand from Airline Customers Hurt PROS Holdings (PRO) in Q3
Conestoga Capital Advisors, an asset management company, released its third-quarter 2024 investor letter. A copy of the letter can be downloaded here. At its September meeting, the Federal Reserve lowered the Federal Funds rate by 50 basis points due to weaker employment growth and moderate inflation. Equity markets welcomed the news, raising optimism for a soft landing in the U.S. economy. On September 26th, the S&P 500 Index achieved a record high, the Russell 2000 Index also moved higher over the quarter but remains roughly 10% below its all-time high. The Conestoga Small Cap Composite surged 10.09% (net) in the third quarter outperforming the Russell 2000 Growth Index’s 8.41% return. The Conestoga SMid Cap Composite returned 12.94% (net) versus the Russell 2500 Growth Index’s 6.99% return. The Conestoga Micro Cap Composite advanced 7.60% (net) but trailed the Russell Microcap Growth Index’s return of 8.57%. Finally, the Conestoga Mid Cap Composite returned 8.36% (net) outperforming the Russell Midcap Growth Index’s 6.54%. Please check the top 5 holdings of the fund for a better understanding of their best picks for 2024.
Conestoga Capital Advisors highlighted stocks like PROS Holdings, Inc. (NYSE:PRO) in the third quarter 2024 investor letter. PROS Holdings, Inc. (NYSE:PRO) offers software solutions that optimize the processes of selling and shopping in the digital economy. The one-month return of PROS Holdings, Inc. (NYSE:PRO) was 0.16%, and its shares lost 44.29% of their value over the last 52 weeks. On October 21, 2024, PROS Holdings, Inc. (NYSE:PRO) stock closed at $18.64 per share with a market capitalization of $879.925 million.
Conestoga Capital Advisors stated the following regarding PROS Holdings, Inc. (NYSE:PRO) in its Q3 2024 investor letter:
"PROS Holdings, Inc. (NYSE:PRO) is a developer of pricing optimization software. The stock underperformed in the third quarter after management pushed out their financial targets given soft demand from their airline customers. Airlines are focused on correcting operational issues, which has led to elongated sales cycles for PROS. The holding was sold from clients’ portfolios during the quarter."
A computer programmer working on a holographic digital twin technology software solution.
PROS Holdings, Inc. (NYSE:PRO) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 17 hedge fund portfolios held PROS Holdings, Inc. (NYSE:PRO) at the end of the second quarter which was 17 in the previous quarter. PROS Holdings, Inc.’s (NYSE:PRO) subscription revenue was $65.6 million in the second quarter, up 14% year-over-year, and total revenue was $82 million, up 8% year-over-year. While we acknowledge the potential of PROS Holdings, Inc. (NYSE:PRO) 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 cheapest AI stock.
In another article, we discussed PROS Holdings, Inc. (NYSE:PRO) and shared Conestoga Capital Advisors' views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q3 2024 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.