Should You Believe in Enfusion’s (ENFN) Healthy Revenue Growth And Margin Expansion in the Future?

Next Century Growth Investors, LLC, an investment Management Company, released its “Small Cap Strategy” second-quarter 2024 investor letter. A copy of the letter can be downloaded here. The equities market in 2024 saw mixed results in the second quarter. Small-cap indices generally posted negative results, whereas large-cap indices posted favorable results. The strategy returned (3.32)% net of fees in the quarter, compared to a (2.91)% return for the Russell 2000 Growth Index. In addition, please check the fund’s top five holdings to know its best picks in 2024.

NCG Small Cap Strategy highlighted stocks like Enfusion, Inc. (NYSE:ENFN), in the second quarter 2024 investor letter. Enfusion, Inc. (NYSE:ENFN) is a company that provides software-as-a-service solutions for the investment management industry. The one-month return of Enfusion, Inc. (NYSE:ENFN) was -11.26%, and its shares lost 3.98% of their value over the last 52 weeks. On August 29, 2024, Enfusion, Inc. (NYSE:ENFN) stock closed at $8.20 per share with a market capitalization of $764.328 million.

NCG Small Cap Strategy stated the following regarding Enfusion, Inc. (NYSE:ENFN) in its Q2 2024 investor letter:

“Enfusion, Inc. (NYSE:ENFN) is a software company with a modern order execution management and portfolio accounting solution for asset managers. The addressable market is large and ripe for disruption as it is dominated by legacy competition with outdated technology. We believe the company is set up for healthy revenue growth and margin expansion in the years ahead.”

A senior financial executive in a power suit in front of a modern high rise building.

Enfusion, Inc. (NYSE:ENFN) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 17 hedge fund portfolios held Enfusion, Inc. (NYSE:ENFN) at the end of the second quarter which was 14 in the previous quarter. In the second quarter of 2024, Enfusion, Inc. (NYSE:ENFN) delivered $49.5 million in revenue, representing 16% year-over-year growth. While we acknowledge the potential of Enfusion, Inc. (NYSE:ENFN) 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 Enfusion, Inc. (NYSE:ENFN) and shared NCG Micro-Cap Strategy’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q2 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.