Could This Fund's $75 Million Bet on ZoomInfo Pay Off After the Stock's 85% Collapse?
Key Points
New York City-based RPD Fund Management added 725,616 shares of ZoomInfo in the third quarter.
The overall position value increased by $13.7 million from quarter to quarter.
As of September 30, RPD reported holding nearly 6.9 million GTM shares valued at $75.3 million.
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On November 14, New York City-based RPD Fund Management disclosed a significant buy of ZoomInfo (NASDAQ:GTM), increasing its position by 725,616 shares in the third quarter, which contributed to an estimated $13.7 million position change.
What Happened
According to a filing with the Securities and Exchange Commission dated November 14, RPD Fund Management purchased an additional 725,616 shares of ZoomInfo during the third quarter. The increased stake brought the fund's total holdings in the company to nearly 6.9 million shares with a reported market value of $75.3 million as of September 30.
What Else to Know
The purchase increased the fund's GTM position to 29.6% of RPD Fund its 13F assets under management.
Top holdings after the filing:
- NASDAQ:GTM: $163.2 million (97.9% of AUM)
- NYSE:HOUS: $2.3 million (1.4% of AUM)
- NYSE:ANF: $752,840 (0.5% of AUM)
- NASDAQ:DOMO: $503,712 (0.3% of AUM)
As of Friday, GTM shares were priced at $9.94, down 9% over the past year and well underperforming the S&P 500, which is up 13% in the same period.
Company Overview
| Metric | Value |
|---|---|
| Price (as of market close Friday) | $9.94 |
| Market Capitalization | $3.2 billion |
| Revenue (TTM) | $1.2 billion |
| Net Income (TTM) | $104.1 million |
Company Snapshot
- ZoomInfo's products include ZoomInfo Copilot, Sales, Marketing, Operations, Talent, and Lite, delivering cloud-based go-to-market intelligence and engagement solutions.
- The company generates revenue primarily through subscription-based access to its data-driven platform, offering workflow tools, predictive analytics, and automated engagement capabilities for sales and marketing professionals.
- ZoomInfo serves a diverse customer base ranging from large enterprises to small businesses across industries such as software, business services, manufacturing, telecommunications, and financial services.
ZoomInfo operates at scale with thousands of employees, positioning itself as a leading provider of B2B intelligence solutions. The company's platform leverages proprietary data and advanced analytics to enable customers to identify, engage, and convert target accounts more effectively. This data-centric approach provides a competitive edge in the rapidly evolving sales and marketing technology landscape.
Foolish Take
Even after a long slide from pandemic-era highs, ZoomInfo’s improving fundamentals may matter more to fundamental research-driven investors than its recent share price volatility. RPD Fund Management’s decision to significantly increase exposure underscores renewed confidence in the company’s ability to stabilize growth and expand margins — something its latest earnings report begins to validate.
ZoomInfo posted record third-quarter revenue of $318 million, up 5% year-over-year, while GAAP operating income jumped 55% to $67.5 million, and adjusted operating margin clocked in at a strong 37%. The company also generated $93.8 million in operating cash flow, a vastly sharp improvement from a year ago. For a fund whose portfolio is now almost entirely concentrated in GTM, the enlarged stake highlights conviction that ZoomInfo’s AI-driven go-to-market platform is still competitively durable despite its deep multiyear drawdown. And the fundamentals do suggest a business regaining operating leverage even as sentiment remains washed out. If execution continues to improve, the stock’s compressed valuation may offer asymmetric upside.
Glossary
13F: A quarterly SEC filing by institutional investment managers disclosing their equity holdings.
Assets Under Management (AUM): The total market value of investments managed on behalf of clients by a fund or firm.
Position: The amount of a particular security or asset held by an investor or fund.
Trailing Twelve Months (TTM): The 12-month period ending with the most recent quarterly report.
Market Value: The current total value of a holding, calculated as shares owned times the current share price.
Go-to-market intelligence: Data and insights used to inform sales and marketing strategies for reaching potential customers.
Proprietary data: Information collected and owned by a company, not publicly available, often providing a competitive advantage.
Predictive analytics: Techniques using data, statistical algorithms, and machine learning to forecast future outcomes.
Automated engagement: Technology-driven processes that interact with customers or prospects without manual intervention.
Reportable assets: Investments that must be disclosed in regulatory filings, such as those required in a 13F report.
Fund holding: A specific security or asset owned within an investment fund's portfolio.
B2B intelligence: Business-to-business data and analytics that help companies identify and understand other businesses as potential clients.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool recommends Abercrombie & Fitch. The Motley Fool has a disclosure policy.
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