Is LENSAR (LNSR) a Deeply Undervalued Stock?

Cedar Grove Capital Management, an investment management company, released its first quarter 2025 investor letter. A copy of the letter can be downloaded here. The strategy returned 0.38% in the first quarter compared to -4.27% for the S&P 500 and -9.51% for the Russell 2000. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first quarter 2025 investor letter, Cedar Grove Capital Management emphasized stocks such as LENSAR, Inc. (NASDAQ:LNSR). LENSAR, Inc. (NASDAQ:LNSR) is a commercial-stage medical device company. The one-month return of LENSAR, Inc. (NASDAQ:LNSR) was -6.64%, and its shares gained 325.94% of their value over the last 52 weeks. On April 9, 2025, LENSAR, Inc. (NASDAQ:LNSR) stock closed at $13.63 per share with a market capitalization of $160.703 million.

Cedar Grove Capital Management stated the following regarding LENSAR, Inc. (NASDAQ:LNSR) in its Q1 2025 investor letter:

“LENSAR, Inc. (NASDAQ:LNSR) was a recent name that we pitched long near the end of February, calling it deeply undervalued and having many characteristics that were ideal for an outsized return in the coming years.

What we didn’t anticipate was how well the market would digest their earnings release just a few days later, and the stock ended up returning ~80% in a month, not that we’re complaining.

The annoying part is that the company announced a buyout o er from Alcon (ALC) on March 24th for $14/share with a CVR attached. Annoying because the stock is worth >$20/share, but unfortunately, it looks like the odds are not in our favor to strike down the deal despite our call for one in our recent open letter…” (Click here to read the full text)

LENSAR, Inc. (NASDAQ:LNSR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 5 hedge fund portfolios held LENSAR, Inc. (NASDAQ:LNSR) at the end of the fourth quarter compared to 5 in the third quarter. In 2024, LENSAR, Inc. (NASDAQ:LNSR) experienced notable revenue growth, with fourth-quarter top-line revenue reaching a record of $16.7 million—marking a 38% increase compared to Q4 2023. While we acknowledge the potential of LENSAR, Inc. (NASDAQ:LNSR) 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 addition, please check out our hedge fund investor letters Q1 2025 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.