Conestoga Capital Advisors, an asset management company, released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. Equity markets continued their momentum that began in early April, reaching new all-time highs in the third quarter. The Conestoga Micro-Cap Composite returned 11.7% net-of-fees in the third quarter, compared to the Russell Microcap Growth Index’s return of 19.9%. Please check the top 5 holdings of the fund for a better understanding of their best picks for 2025.
In its third-quarter 2025 investor letter, Conestoga Capital Advisors highlighted stocks such as Phreesia, Inc. (NYSE:PHR). Headquartered in Wilmington, Delaware, Phreesia, Inc. (NYSE:PHR) is an integrated SaaS-based software and payment platform provider for the healthcare sector. The one-month return of Phreesia, Inc. (NYSE:PHR) was -6.91%, and its shares gained 17.44% of their value over the last 52 weeks. On October 17, 2025, Phreesia, Inc. (NYSE:PHR) stock closed at $22.29 per share, with a market capitalization of $1.335 billion.
Conestoga Capital Advisors stated the following regarding Phreesia, Inc. (NYSE:PHR) in its third quarter 2025 investor letter:
“Phreesia, Inc. (NYSE:PHR) provides patient-intake and payments software to healthcare providers. PHR reported better than expected second quarter results, with revenue growth of 15% and EBITDA margins expanding to 19%. The company again raised its full-year profitability outlook. In conjunction with the earnings release, PHR announced the acquisition of AccessOne, a receivables financing platform, for $160 million. The deal adds $35 million in revenue and $11 million in EBITDA, but gave investors pause as they expand into a new area within their payments platform.”
Phreesia, Inc. (NYSE:PHR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 28 hedge fund portfolios held Phreesia, Inc. (NYSE:PHR) at the end of the second quarter, the same as in the previous quarter. In the second quarter of fiscal 2026, Phreesia, Inc. (NYSE:PHR) reported total revenue of $117.3 million, an increase of 15% year over year. While we acknowledge the potential of Phreesia, Inc. (NYSE:PHR) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
In another article, we covered Phreesia, Inc. (NYSE:PHR) and shared the list of best small cap stocks to buy. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.