CCC Intelligent Solutions stock downgraded by JPMorgan on slow growth

Investing.com - JPMorgan downgraded CCC (WA:CCCP) Intelligent Solutions Holdings Inc. (NASDAQ:CCCS) from Neutral to Underweight on Monday, setting a price target of $10.00 amid concerns over slowing growth. The stock, currently trading at $9.34, appears overvalued according to InvestingPro analysis, despite maintaining impressive gross profit margins of 76%.

The downgrade reflects a challenging environment for the company in recent quarters, with JPMorgan noting slow adoption of emerging solutions indicating weak demand from corporate customers. Simultaneously, the firm observed more pronounced declines in claims volume, suggesting end-customer sensitivity to rising insurance premiums. This sentiment is echoed by InvestingPro data, which shows five analysts have recently revised their earnings expectations downward.

Despite CCC Intelligent Solutions highlighting various growth initiatives, including artificial intelligence, JPMorgan expects the company’s organic revenue growth to continue decelerating from its recent peak in 2021. While the company maintains a moderate revenue growth of 9.05%, the investment bank’s analysis suggests the pullback in claims volume could persist well into 2026. Get deeper insights into CCCS’s growth prospects with the comprehensive Pro Research Report, available exclusively on InvestingPro, along with 10+ additional ProTips and advanced financial metrics.

The downgrade positions CCC Intelligent Solutions unfavorably compared to other companies in JPMorgan’s Vertical SaaS coverage universe. The firm’s previous Neutral rating had been more optimistic about the company’s prospects.

CCC Intelligent Solutions provides cloud-based software solutions for the property and casualty insurance economy, including claims management and repair estimation tools for automotive insurance carriers and repair facilities.

In other recent news, CCC Intelligent Solutions Holdings Inc. reported its first-quarter 2025 earnings, revealing a steady financial performance. The company met its earnings per share (EPS) forecast of $0.08, with revenue slightly exceeding expectations at $251.6 million, surpassing the projected $249.76 million. This revenue figure represents a 10.7% increase year-over-year, highlighting the company’s growth trajectory. Additionally, CCC Intelligent Solutions achieved a milestone by crossing the $1 billion revenue run rate for the first time. The company also maintained strong customer retention, with a software gross dollar retention rate of 99%.

In terms of executive changes, CCC Intelligent Solutions announced the forthcoming departure of Marc Fredman, the Senior Vice President and Chief Strategy Officer, who plans to resign by September 30, 2025. Fredman will continue to support the company in a part-time advisory role after his resignation. While the company has not announced a successor, this development may be of interest to investors monitoring the company’s strategic direction.

Looking ahead, CCC Intelligent Solutions projects full-year 2025 revenue between $1.046 billion and $1.056 billion, indicating an 11% year-over-year growth. However, the company remains cautious about macroeconomic factors that could impact sales cycles. In terms of analyst activity, there was no mention of upgrades or downgrades in the recent reports.

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