Here’s Why Baron Discovery Fund Betted on Waystar Holding Corp. (WAY)
Baron Funds, an investment management company, released its “Baron Discovery Fund” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. The Fund focuses on long-term, competitively positioned companies that are well-managed and have significant potential in untapped markets. The letter also addressed the advancements in AI and how humans define themselves in the changing landscape. In Q4, the fund generated a return of 0.19% (Institutional Shares), underperforming the Russell 2000 Growth Index by 1.03 percentage points. Over the entire year, the fund posted a return of 10.96%, while the Index returned 13.01%. The outperformance of low-quality and short-term price momentum-oriented stocks affected the Fund’s focus on long-term valuation metrics. The top 10 holdings comprised 26.7% of the Fund’s net assets, with cash making up 3.3%. The Fund maintains strong optimism and expects a high-growth, low-inflation environment in 2026. Please review the Fund’s top five holdings to gain insights into their key selections for 2025.
In its fourth-quarter 2025 investor letter, Baron Discovery Fund highlighted stocks like Waystar Holding Corp. (NASDAQ:WAY). Waystar Holding Corp. (NASDAQ:WAY) is a technology company that provides software solutions for healthcare payments. On February 3, 2026, Waystar Holding Corp. (NASDAQ:WAY) stock closed at $24.50 per share. Waystar Holding Corp. (NASDAQ:WAY) delivered a -27.26% return in the past month, and its shares are down 41.61% over the past twelve months. Waystar Holding Corp. (NASDAQ:WAY) has a market capitalization of $4.687 billion.
Baron Discovery Fund stated the following regarding Waystar Holding Corp. (NASDAQ:WAY) in its fourth quarter 2025 investor letter:
"We initiated a position in Waystar Holding Corp. (NASDAQ:WAY), which provides a full spectrum of revenue cycle management software to health care providers. The company services 30,000 clients, representing over 1 million distinct providers. And it processes 6 billion transactions per year, including over $1.8 trillion in annual gross claims which span about 50% of all U.S. patients. Waystar’s $1 billion-plus in estimated 2025 revenues are a 50/50 combination of subscription and volume-based revenue (we believe volume is a true secular grower as health care claims are constantly increasing).
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