Jack Henry & Associates (JKHY) Declined in Line with Broader Industry Downturn

Conestoga Capital Advisors, an asset management company, released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. Equity markets continued their momentum that began in early April, reaching new all-time highs in the third quarter. Conestoga Smid Cap Composite underperformed the Russell 2500 Growth Index in the quarter and returned -1.1% net-of-fees vs +10.7% for the index. The narrow and “low quality” leadership in the stock market rally that began in April grew stronger in the third quarter. Please check the top 5 holdings of the fund for a better understanding of their best picks for 2025.

In its third-quarter 2025 investor letter, Conestoga Capital Advisors highlighted stocks such as Jack Henry & Associates, Inc. (NASDAQ:JKHY). Jack Henry & Associates, Inc. (NASDAQ:JKHY) is a financial technology company that connects people and financial institutions. The one-month return of Jack Henry & Associates, Inc. (NASDAQ:JKHY) was 1.75%, and its shares lost 17.83% of their value over the last 52 weeks. On October 17, 2025, Jack Henry & Associates, Inc. (NASDAQ:JKHY) stock closed at $152.93 per share, with a market capitalization of $11.113 billion.

Conestoga Capital Advisors stated the following regarding Jack Henry & Associates, Inc. (NASDAQ:JKHY) in its third quarter 2025 investor letter:

"Jack Henry & Associates, Inc. (NASDAQ:JKHY) provides core processing, digital banking, and payments technology solutions for U.S. financial institutions. The stock, along with other financial technology stocks, have been under pressure for various reasons including concerns over deposit growth and possible disruption from AI software companies. The company itself has faced some company specific growth headwinds, which we believe to be transitory, most notably outsized M+A of some of their larger customers."

Jack Henry & Associates, Inc. (NASDAQ:JKHY) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 26 hedge fund portfolios held Jack Henry & Associates, Inc. (NASDAQ:JKHY) at the end of the second quarter, compared to 31 at the end of the previous quarter.  While we acknowledge the potential of Jack Henry & Associates, Inc. (NASDAQ:JKHY) 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 Jack Henry & Associates, Inc. (NASDAQ:JKHY) and shared Aoris International Fund's views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q3 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.