Here’s Why ZipRecruiter (ZIP) Declined in Q3
Meridian Funds, managed by ArrowMark Partners, released its “Meridian Small Cap Growth Fund” third quarter 2023 investor letter. A copy of the same can be downloaded here. The fund returned -10.24% (net) in the third quarter compared to the Russell 2000 Growth Index’s -7.32% return. Overall, underperformance during the quarter resulted from the market's muted or occasionally negative response to macroeconomic reports, even though several of the firms the strategy owned exceeded earnings estimates and improved outlook. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Meridian Small Cap Growth Fund highlighted stocks like ZipRecruiter, Inc. (NYSE:ZIP) in the third quarter 2023 investor letter. Headquartered in Santa Monica, California, ZipRecruiter, Inc. (NYSE:ZIP) is a marketplace that connects job seekers and employers. On December 22, 2023, ZipRecruiter, Inc. (NYSE:ZIP) stock closed at $14.19 per share. One-month return of ZipRecruiter, Inc. (NYSE:ZIP) was 10.86%, and its shares lost 12.73% of their value over the last 52 weeks. ZipRecruiter, Inc. (NYSE:ZIP) has a market capitalization of $1.402 billion.
Meridian Small Cap Growth Fund made the following comment about ZipRecruiter, Inc. (NYSE:ZIP) in its Q3 2023 investor letter:
"ZipRecruiter, Inc. (NYSE:ZIP) is a leading online employment marketplace that connects millions of job seekers with companies of all sizes. ZipRecruiter’s AI-powered matching technology provides employers with an efficient and cost-effective way to target qualified candidates while also empowering job candidates to identify jobs where they have the most likelihood of getting hired. Reducing the amount of work required to hire people provides a strong value proposition for employers. The overall recruiting market is $280 billion in the U.S. and ninety percent of this work is still performed by legacy recruiting agencies that employ a time-consuming and inefficient process. ZipRecruiter’s online marketplace enables a more efficient and lower-cost hiring process that applies to employers of all types and sizes. The stock declined during the quarter as rising rates, slower economic activity, and lower levels of job hopping led to reduced hiring. The market also reacted negatively to management’s decision to pull guidance for the remainder of the year, citing inconsistent and atypical hiring patterns. Despite the macro-induced weakness, we were encouraged by management’s cost control measures which resulted in costs declining faster than revenues. With a strong value proposition for its customers and new products that can continue company’s continue to leverage the Company’s AI advantage, we see ZipRecruiter as a market share gainer through both the current downturn and the eventual recovery when the hiring environment improves. As such, we maintained our position in the company during the quarter."
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ZipRecruiter, Inc. (NYSE:ZIP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held ZipRecruiter, Inc. (NYSE:ZIP) at the end of third quarter which was 16 in the previous quarter.
We discussed ZipRecruiter, Inc. (NYSE:ZIP) in another article and shared the list of best staffing company stocks to buy. In addition, please check out our hedge fund investor letters Q3 2023 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.
