CCC Intelligent Solutions' Growth Stunted By Slow Rollouts And Declining Claims: Analyst

JP Morgan analyst Alexei Gogolev downgraded CCC Intelligent Solutions Holdings Inc. CCCS from Neutral to Underweight with a $10 price forecast on Monday.

The rerating is relative to other names Gogolev covered within the Vertical SaaS universe, as he noted better opportunities to play the space elsewhere.

Gogolev noted that CCC Intelligent Solutions has been discussing depressed claims volume levels for several quarters, with initial management expecting the dynamic to normalize in 2025.

Also Read: Accenture’s Raised Outlook Fails To Ease Fiscal 2026 Softness Worries: Analyst

However, the company is now facing a more pronounced decline in claims volume, which the analyst noted may continue well into 2026.

The reported dynamic is surprising, considering that the industry is facing increased driving violation rates, distracted driving on the rise among Gen Z, and increased bodily injury and material damage rates, he said.

Gogolev concluded that elevated insurance premium growth will reduce claims volumes as consumers adjust to the higher cost of owning a vehicle.

While CCC Intelligent Solutions has mentioned that it anticipates emerging solutions contributing 3-4% to long-term revenue growth, the analyst noted that adopting those solutions has been slower than expected, with particular solution launches being delayed.

In the first quarter of 2025, he said that emerging solutions added just over 1.5% to revenue growth, leading to a weaker-than-expected organic headline topline dynamic.

CCC Intelligent Solutions’ revenue is primarily recurring, with 80% from subscriptions and 20% from transactional revenue, according to analyst Gogolev.

He noted a multi-year decline in claims volume, a trend he expects to continue due to weakened customer sentiment.

Gogolev projects this challenging environment, characterized by what he calls a “negative claim volume,” could persist for over eight quarters, despite some seemingly positive market indicators.

He remains cautious on the macro outlook, anticipating no immediate improvement in customer sentiment. For the second quarter, Gogolev forecasts revenue of $257 million and adjusted EPS of 9 cents.

Price Action: CCCS stock is trading lower by 1.68% to $9.195 at last check Monday.

Read Next:

• Circle’s Flagship Stablecoin USDC Set For Rapid Growth, Analyst Says Regulatory Climate Key

Photo by Tapati Rinchumrus via Shutterstock