Home Hedge Funds Is Definitive Healthcare Corp. (DH) a Cyclical Stock?

Is Definitive Healthcare Corp. (DH) a Cyclical Stock?

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Baron Funds, an investment management company, released its “Baron Discovery Fund” third quarter 2022 investor letter. A copy of the same can be downloaded here. Compared to the Russell 2000 Growth Index benchmark, which was slightly positive, the fund (institutional shares) was flat in the third quarter. In addition, please check the fund’s top five holdings to know its best picks in 2022.

In the third-quarter letter, Baron Funds discussed stocks like Definitive Healthcare Corp. (NASDAQ:DH). Headquartered in Framingham, Massachusetts, Definitive Healthcare Corp. (NASDAQ:DH) is a US-based healthcare commercial intelligence solutions provider. On October 28, 2022, Definitive Healthcare Corp. (NASDAQ:DH) stock closed at $15.74 per share. One-month return of Definitive Healthcare Corp. (NASDAQ:DH) was 1.29% and its shares lost 60.79% of their value over the last 52 weeks. Definitive Healthcare Corp. (NASDAQ:DH) has a market capitalization of $1.582 billion.

Baron Funds made the following comment about Definitive Healthcare Corp. (NASDAQ:DH) in its Q3 2022 investor letter:

“Shares of Definitive Healthcare Corp. (NASDAQ:DH), a commercial intelligence software provider for health care companies, underperformed due to concerns around slower sales cycles in the uncertain macroeconomic environment. Although second quarter revenues were up 37% and beat consensus expectations, current revenue performance obligations (a measure of contracted revenues for the next 12 months) slightly missed management expectations by $3 million or about 4% on an annualized basis. Definitive attributes this to customers applying more scrutiny to new vendor contracts and bringing in additional layers of management before finalizing contracts. Importantly, Definitive continues to see healthy demand at the top of the sales funnel. While we acknowledge there is less certainty around near-term growth, we think this is reflected in the stock’s current valuation and we see any macro related headwinds as temporary in nature. We continue to see Definitive as a high-quality company with fantastic cash flow margins (near 30%), a differentiated offering, and a long runway of growth.”

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Definitive Healthcare Corp. (NASDAQ:DH) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 7 hedge fund portfolios held Definitive Healthcare Corp. (NASDAQ:DH) at the end of the second quarter which was 12 in the previous quarter.

We discussed Definitive Healthcare Corp. (NASDAQ:DH) in another article and shared Baron Funds’ views on the company. In addition, please check out our hedge fund investor letters Q3 2022 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.

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