Another Cog Falls Off: PRCT and the Art of Controlled Descent

by

Chicago Capital, a firm whose name suggests both ambition and a regrettable lack of geographic imagination, has subtly eased its grip on PROCEPT BioRobotics (PRCT 0.55%). Not a frantic scramble for the exits, mind you. More of a dignified, yet pointed, reduction in holdings. They shed 377,850 shares in the last quarter, translating to roughly $12.53 million – a sum that, in the grand scheme of things, is merely the cost of a moderately sized regret.1

The fund’s remaining stake in PRCT is now valued at $37.47 million, which, if you think about it, is still enough to buy a very impressive collection of slightly used robotic arms. The net change in value, factoring in both the sale and the stock’s… let’s call it ‘spirited decline’… came to a negative $18.52 million. A figure that, when viewed through the lens of actuarial pessimism, is precisely what one would expect.

As of January 26th, PROCEPT accounted for a mere 0.93% of Chicago Capital’s 13F assets – down from 1.38% previously. This isn’t necessarily a vote of no confidence, of course. It’s more a demonstration of the principle that even the most optimistic alchemist occasionally needs to rearrange their vials.2

Their top holdings, for those keeping score (and frankly, who isn’t?), remain firmly rooted in the realm of the predictably dominant: Google ($248.84 million), Meta ($189.10 million), Amazon ($168.92 million), Nvidia ($148.39 million), and Visa ($141.11 million). Solid, dependable empires built on the shifting sands of consumer attention and, occasionally, sheer luck.

Now, about that PROCEPT share price. Down a staggering 60.4% over the past year. The S&P 500, meanwhile, has been enjoying a rather smug 14% gain. It’s a tale as old as time: innovation promises riches, reality delivers… well, a significant dent in one’s portfolio.

A Brief Overview of the Machinery

Metric Value
Market capitalization $1.65 billion
Revenue (TTM) $299.91 million
Net income (TTM) ($84.58 million)
Price (as of January 26) $29.61

PROCEPT BioRobotics, for the uninitiated, develops and sells the AquaBeam Robotic System, a device dedicated to the noble art of Aquablation therapy. This involves, in essence, precisely removing excess prostatic tissue, a task that, until recently, involved considerably more discomfort and a higher risk of collateral damage. They sell the robots, they sell the disposable bits that go in the robots, and they sell service contracts to ensure the robots don’t develop a sudden aversion to prostate glands. It’s a surprisingly lucrative niche.

  • PROCEPT BioRobotics develops and commercializes the AquaBeam Robotic System and Aquablation therapy for minimally invasive urologic surgery, primarily targeting benign prostatic hyperplasia (BPH).
  • The company generates revenue through the sale of robotic systems, recurring sales of single-use consumables, and service contracts related to its installed base.
  • It serves hospitals and urology centers, with a focus on urologists treating male patients suffering from lower urinary tract symptoms due to BPH.

In essence, they’re a surgical robotics firm specializing in… well, let’s just say a particularly sensitive area. Their competitive advantage lies in their innovative Aquablation therapy and a growing installed base of robots, primarily in the United States, but increasingly elsewhere. It’s a good idea, in theory. The challenge, as always, is turning that good idea into sustainable profitability.

What Does This All Mean?

Cutting exposure after a significant downturn isn’t necessarily a sign of panic. Sometimes it’s just sensible portfolio management. Chicago Capital deals in the currency of risk, and a volatile, single-product medtech firm presents a different risk profile than, say, Google. It’s the difference between betting on a promising young wizard and investing in the established Guild of Alchemists.

PROCEPT is growing, admittedly. Third-quarter revenue rose 43% year-over-year, gross margins expanded, and the U.S. installed base climbed to 653 systems. They’re projecting revenue of $410 to $430 million in 2026, implying up to 32% growth. But the stock tells a different story. Concerns about operating losses, elevated spending, and the speed at which growth can translate into actual profit are weighing on investor sentiment. They posted an adjusted EBITDA loss of $7.4 million last quarter and remain firmly in “investment mode,” which is a polite way of saying “spending money faster than they’re making it.”

Ultimately, Chicago Capital’s largest positions are concentrated in the reliably cash-generating tech giants. Against that backdrop, trimming a volatile medtech name looks less like a loss of confidence and more like… well, common sense. The world, after all, is full of things that can go wrong. And sometimes, the most sensible thing to do is simply acknowledge that fact.

1 One must remember that even the most sophisticated financial instruments are, at their core, simply elaborate ways of transferring money from one person to another. It’s a bit like a very complex game of pass-the-parcel, only the parcel is usually someone else’s retirement fund.

2 The Guild of Alchemists, for those unfamiliar with the intricacies of the arcane financial world, is a notoriously conservative institution. They believe in the power of gold, the sanctity of compound interest, and the inherent unreliability of anything involving dragons.

Read More

2026-02-02 02:53