Can Accolade (ACCD) Sustain an Annual Revenue Growth Rate of 20%?

Next Century Growth Investors, LLC, an investment Management Company, released its “Micro-Cap Strategy” first-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the first quarter of 2024, the market continued 2023 momentum. The strategy returned 6.75% (net of fees) compared to a 6.60% return for the Russell Microcap Growth Index. The strategy outperformed across most sectors but underperformed in health care.  In addition, please check the fund’s top five holdings to know its best picks in 2024.

Next Century Growth Investors Micro-Cap Strategy highlighted stocks like Accolade, Inc. (NASDAQ:ACCD) in the first quarter 2024 investor letter. Accolade, Inc. (NASDAQ:ACCD) engages in the development and provision of personalized and technology-enabled solutions that enable people to understand, navigate, and utilize the healthcare system and workplace benefits. The one-month return of Accolade, Inc. (NASDAQ:ACCD) was -12.01%, and its shares lost 53.29% of their value over the last 52 weeks. On June 13, 2024, Accolade, Inc. (NASDAQ:ACCD) stock closed at $6.45 per share with a market capitalization of $505.402 million.

Next Century Growth Investors Micro-Cap Strategy stated the following regarding Accolade, Inc. (NASDAQ:ACCD) in its first quarter 2024 investor letter:

"Accolade, Inc. (NASDAQ:ACCD) is a healthcare delivery company offering advocacy & navigation, expert medical opinion, and virtual primary care primarily for employees of self-insured companies. They also work with health plans and some government programs. Their services help members find the right doctors, get the best prices, manage chronic illnesses, handle medical claims etc. This translates to a better experience for the member and cost savings for the employer. The company believes they can sustain annual revenue growth of 20% and, after years of heavy investment, have a target of achieving adjusted EBITDA profitability in FY25 (ending Feb 2025) with continued margin expansion thereafter."

A webinar between a physician and a group of healthcare professionals discussing best practices.

Accolade, Inc. (NASDAQ:ACCD) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 16 hedge fund portfolios held Accolade, Inc. (NASDAQ:ACCD) at the end of the first quarter which was 15 in the previous quarter. In the quarter Accolade, Inc. (NASDAQ:ACCD) generated approximately $125 million in revenue, a pro forma growth of 30% year over year. While we acknowledge the potential of Accolade, Inc. (NASDAQ:ACCD) 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 Accolade, Inc. (NASDAQ:ACCD) and shared the list of Cathie Wood Stocks Insiders are Selling. In addition, please check out our hedge fund investor letters Q1 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.