Lakehouse Capital, a Sydney-based investment manager, released its “Lakehouse Global Growth Fund” January 2025 investor letter. A copy of the letter can be downloaded here. January was a strong month for the fund, fueled by excellent results from several of portfolio companies. The Fund returned 7.3% net of fees and expenses for the month compared to 2.6% for its benchmark. Since its inception in December 2017, the Fund has returned 19.3%, in annualized terms, compared to 12.8% for its benchmark, the MSCI All Country World Index, Net Total Returns (AUD). In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its January 2025 investor letter, Lakehouse Global Growth Fund emphasized stocks such as ServiceNow, Inc. (NYSE:NOW). ServiceNow, Inc. (NYSE:NOW) offers intelligent workflow automation solutions for digital businesses. The one-month return of ServiceNow, Inc. (NYSE:NOW) was -9.02%, and its shares lost 5.97% of their value over the last 52 weeks. On April 7, 2025, ServiceNow, Inc. (NYSE:NOW) stock closed at $735.50 per share with a market capitalization of $152.25 billion.
Lakehouse Global Growth Fund stated the following regarding ServiceNow, Inc. (NYSE:NOW) in its January 2025 investor letter:
“US-based software company ServiceNow, Inc. (NYSE:NOW) delivered another impressive quarterly result. Revenues grew 21% year-on-year in constant currency terms to $2.9 billion and net income grew 30% year-on-year to $384 million. The company’s key performance indicators remained healthy, with their backlog (remaining performance obligations) growing 23% year-on-year to $22.3 billion (i.e. greater than 2x annual revenue) and renewal rates held firm at 98%. As we have noted in the past, the company’s renewal rates are remarkable as not only are they best-in-class, but they are also extremely consistent, typically in the range of 97% to 99%. These industry-leading renewal rates speak to the mission critical nature of the platform and are a key driver of the long-term annuity value in the business. Zooming out, we continue to believe ServiceNow is one the highest quality software businesses globally as the combination of consistent growth at scale, robust free cash flow generation and a large addressable market make it a compelling opportunity.”
A team of software engineers at desks working on code for a cutting-edge cloud computing solution.
ServiceNow, Inc. (NYSE:NOW) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 110 hedge fund portfolios held ServiceNow, Inc. (NYSE:NOW) at the end of the fourth quarter compared to 78 in the third quarter. In the fourth quarter of 2024, ServiceNow, Inc’s (NYSE:NOW) subscription revenue increased 21% year-over-year to $2.866 billion. While we acknowledge the potential of ServiceNow, Inc. (NYSE:NOW) 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.
We covered ServiceNow, Inc. (NYSE:NOW) in another article, where we shared the list of stocks Jim Cramer recently discussed. 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.