Hayden Capital's Review on SmartRent (SMRT)

Hayden Capital, an investment management firm, released its second-quarter 2025 investment letter. A copy of the letter can be downloaded here. As the geopolitical worries eased, the portfolio experienced a strong second quarter. In the second quarter, the portfolio generated a 17.6% return, outperforming the S&P 500's 10.9% return and the MSCI World Index's 11.3% return. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its second-quarter 2025 investor letter, Hayden Capital highlighted stocks such as SmartRent, Inc. (NYSE:SMRT). Headquartered in Scottsdale, Arizona, SmartRent, Inc. (NYSE:SMRT) is an enterprise real estate technology company. The one-month return of SmartRent, Inc. (NYSE:SMRT) was 54.17%, and its shares lost 12.94% of their value over the last 52 weeks. On August 29, 2025, SmartRent, Inc. (NYSE:SMRT) stock closed at $1.48 per share, with a market capitalization of $278.345 million.

Hayden Capital stated the following regarding SmartRent, Inc. (NYSE:SMRT) in its second quarter 2025 investor letter:

"SmartRent, Inc. (NYSE:SMRT): This quarter, we sold our remaining shares in SmartRent. “Disappointing” is the only way to describe our investment over the last three years.

While shareholders could easily blame it on the macro environment, I think our investment mistake runs much deeper. It was misjudging the people.

We first invested in mid-2022, and were excited by a rapidly growing software business, that was disrupting the multifamily apartment industry. Revenues grew ~+52% y/y the first year of our ownership, and traction continued at ~+41% y/y in 2023. Meanwhile operating margins trended in the right direction, improving from -62% to -18% during that time frame – well on their way to profitability the following year. (See our original investment thesis for more information; LINK).

Starting with smart access (keyless entry), SmartRent had an opportunity to eventually become the “operating system” for multifamily rental operations…” (Click here to read the full text)

SmartRent, Inc. (NYSE:SMRT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 23 hedge fund portfolios held SmartRent, Inc. (NYSE:SMRT) at the end of the second quarter, which was 17 in the previous quarter. SmartRent, Inc. (NYSE: SMRT) reported total revenue of $38.3 million in Q2 2025, which represents a 7% decrease sequentially and a 21% decrease year-over-year. While we acknowledge the potential of SmartRent, Inc. (NYSE:SMRT) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered SmartRent, Inc. (NYSE:SMRT) and shared the list of best AI stocks to buy under $3. In addition, please check out our hedge fund investor letters Q2 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.