Workiva (WK) Stock Dropped on Cautious 2024 Guidance

TimesSquare Capital Management, an equity investment management company, released its “U.S. Small Cap Growth Strategy” first-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the quarter the fund returned 5.77% (net), compared to a 7.58% return for the Russell 2000 Growth Index. Despite a decline in many equity markets in January, they rebounded over the following two months, resulting in a robust 2024 first quarter. In addition, please check the fund’s top five holdings to know its best picks in 2024.

TimesSquare Capital U.S. Small Cap Growth Strategy highlighted stocks like Workiva Inc. (NYSE:WK), in the first quarter 2024 investor letter. Workiva Inc. (NYSE:WK) offers cloud-based reporting solutions. The one-month return of Workiva Inc. (NYSE:WK) was -10.99%, and its shares lost 29.74% of their value over the last 52 weeks. On June 20, 2024, Workiva Inc. (NYSE:WK) stock closed at $70.76 per share with a market capitalization of $3.879 billion.

TimesSquare Capital U.S. Small Cap Growth Strategy stated the following regarding Workiva Inc. (NYSE:WK) in its first quarter 2024 investor letter:

"Among the wide variety of Information Technology companies, we prefer critical system providers, specialized component designers, and systems that improve productivity or efficiency for their clients. Workiva Inc. (NYSE:WK) supplies cloud-based compliance and regulatory reporting solutions. Its fourth quarter was solid with total revenue, subscription revenues, operating income, and billings all surpassing estimates. However, management’s 2024 guidance factored in macroeconomic uncertainty and that was viewed as underwhelming by investors as its shares fell by -16%."

A software engineer debugging a compliance code on a laptop in a modern office setting.

Workiva Inc. (NYSE:WK) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 22 hedge fund portfolios held Workiva Inc. (NYSE:WK) at the end of the first quarter which was 2o in the previous quarter. In the first quarter, Workiva Inc. (NYSE:WK) reported a total revenue of $175.7 million, a substantial 17% growth from Q1 2023. While we acknowledge the potential of Workiva Inc. (NYSE:WK) 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 Workiva Inc. (NYSE:WK) and shared Artisan Small Cap Fund's views on the company. TimesSquare Capital U.S. Small Cap Growth Strategy stated about Workiva Inc. (NYSE:WK) in the previous quarter investor letter. 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.