Up 44% Since IPO: Why a Major Fund Just Made a $45 Million Bet on This Digital Health Stock

Connecticut-based fund Braidwell initiated a new stake in Hinge Health (NYSE:HNGE), adding 910,476 shares during the third quarter, an estimated $44.7 million position, according to a November 14 SEC filing.

What Happened

According to a Securities and Exchange Commission (SEC) filing published November 14, Braidwell established a new position in Hinge Health (NYSE:HNGE), acquiring 910,476 shares during the third quarter. The estimated value of the stake is $44.7 million based on the quarter-end price. Hinge Health did not appear in the fund’s previous quarterly disclosure.

What Else to Know

The new position in Hinge Health accounts for 1.8% of Braidwell's $2.5 billion in reportable U.S. equity assets under management as of September 30.

Top holdings after the filing:

• NASDAQ:CAI: $221.3 million (9% of AUM)
• NASDAQ:XENE: $144.7 million (5.9% of AUM)
• NASDAQ:CGON: $132.3 million (5.4% of AUM)
• NASDAQ:NBIX: $123.6 million (5% of AUM)
• NASDAQ:KRYS: $91.9 million (3.7% of AUM)

As of Wednesday, shares of Hinge Health were priced at $46.02, up 43% since their IPO price of $32 in May and well outperforming the S&P 500, which is up 13%.

Company Overview

Company Snapshot

• Hinge Health offers a digital health platform focused on musculoskeletal care, including solutions for joint and muscle health, acute injury management, chronic pain, and post-surgical rehabilitation.
• The company operates a software-as-a-service (SaaS) business model, providing digital health solutions to clients on a subscription basis.
• It serves large employers, health insurers, and healthcare providers seeking to improve outcomes and reduce costs for musculoskeletal conditions.

Hinge Health, Inc. is a healthcare technology company specializing in digital solutions for musculoskeletal health, leveraging a scalable software platform to address chronic pain and rehabilitation needs. The company operates at significant scale, with its enterprise-focused approach and integration with employer and insurer health programs underpin its competitive differentiation in the healthcare technology landscape.

Foolish Take

A big fund stepping into a newly public name this early often signals conviction not just in momentum, but in the underlying economics—and Hinge Health’s latest results give long-term investors a clearer picture of what that bet is tied to. The company is scaling rapidly: Third-quarter revenue jumped 53% year-over-year to $154.2 million, while GAAP gross margin expanded to 82% and free cash flow hit a record $81.3 million. With more than 1.5 million lifetime members and a 25% increase in clients to 2,560, Hinge is demonstrating the operating leverage and sticky enterprise relationships investors typically look for in digital health platforms.

For Braidwell, a new SaaS-heavy healthcare name fits neatly alongside its broader thesis of backing scaled, high-need solutions. The 1.8% allocation is small relative to top positions but aligns with its pattern of building early stakes in companies showing accelerating fundamentals.

Long-term investors should watch whether Hinge can sustain margin expansion as it continues investing in AI-powered care delivery. Updated guidance—calling for full-year revenue growth of 47% and non-GAAP operating income of $106 million to 108 million—adds support to the growth narrative, but valuation and competition in employer-focused digital health remain among the most important risks.

Glossary

Stake: The ownership interest or investment a person or entity holds in a company.
Assets under management (AUM): The total market value of investments that a fund or manager oversees on behalf of clients.
Reportable AUM: The portion of a fund’s assets that must be disclosed in regulatory filings.
Position: The amount of a particular security or investment held by an investor or fund.
Quarterly disclosure: A report funds must file every three months, detailing their investment holdings.
Top holdings: The largest investments in a fund’s portfolio, usually ranked by market value.
Alpha: A measure of an investment’s performance compared to a benchmark, indicating value added or subtracted by active management.
Musculoskeletal care: Medical treatment and management of bones, muscles, joints, and related conditions.
Employer and insurer health programs: Health benefit plans provided by companies or insurance firms to cover employees or members.
Third quarter: The three-month period from July 1 to September 30 in a company’s financial year.
Digital health platform: Technology-based services that deliver healthcare solutions, often remotely or via software.
TTM: The 12-month period ending with the most recent quarterly report.
Software-as-a-service (SaaS): A business model in which software is licensed on a subscription basis and is centrally hosted.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Krystal Biotech. The Motley Fool recommends Neurocrine Biosciences. The Motley Fool has a disclosure policy.