Conestoga Capital Advisors, an asset management firm, released its Q4 2025 investor letter. A copy of the letter can be downloaded here. In Q4 2025, Conestoga Capital Advisors’ Mid Cap strategy returned -5.75% net of fees, compared to the -3.70% return for the Russell Midcap Growth Index. The underperformance was due to negative stock selection in the technology and industrial sectors, while positive sector allocation effects partially alleviated the underperformance. The Mid Cap Composite returned -4.73% net of fees for the full year 2025, lagging the benchmark return of 8.66%. Review the strategy’s top five holdings to learn about its key picks for 2025.
In its Q4 2025 investor letter, Conestoga Capital Advisors highlighted stocks like CoStar Group, Inc. (NASDAQ:CSGP). CoStar Group, Inc. (NASDAQ:CSGP) is a provider of online marketplace services, analytics and information for the commercial and residential real estate markets. On February 19, 2026, CoStar Group, Inc. (NASDAQ:CSGP) stock closed at $49.07 per share. CoStar Group, Inc. (NASDAQ:CSGP)’s monthly performance was -25.20% and its shares lost 36.10% of its value in the last three months. CoStar Group, Inc. (NASDAQ:CSGP) has a market capitalization of $20,797 million.
Conestoga Capital Advisors stated the following regarding CoStar Group, Inc. (NASDAQ:CSGP) in its Q4 2025 investor letter:
“CoStar Group, Inc. (NASDAQ:CSGP), the leading provider of commercial and residential real estate data and marketplace platforms, experienced stock price pressure in the fourth quarter. The main obstacle was the company’s aggressive investment in its Homes.com platform, as high spending materially affected overall profitability. Furthermore, Apartment.com’s bookings did not meet investors’ expectations. While CSGP’s expansion into the residential real estate market represents a significant long-term growth opportunity, the significant marketing investment required to gain market share put pressure on margins in the short term. Further weighing on sentiment, media reports late in the quarter suggested that Google could enter the home-for-sale listings market, raising concerns about increased competition and contributing to valuation pressure.”
CoStar Group, Inc. (NASDAQ:CSGP) isn’t on our list of the 30 most popular stocks among hedge funds. According to our database, 57 hedge fund portfolios owned CoStar Group, Inc. (NASDAQ:CSGP) at the end of the third quarter, compared to 59 in the previous quarter. While we recognize the potential of CoStar Group, Inc. (NASDAQ:CSGP) as an investment, we believe certain AI stocks offer greater growth potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that’s also benefiting significantly from Trump-era tariffs and the offshoring trend, check out our free report on best short-term AI stock.