Barclays downgrades CCC Intelligent to Equal-Weight, lowers PT to $11 from $12.

Barclays downgrades CCC Intelligent to Equal-Weight, lowers PT to $11 from $12.

Barclays has downgraded CCC Intelligent Solutions (NASDAQ: CCCI) to Equal-Weight from Overweight, reducing its price target to $11 from $12. The investment bank cited concerns over the company's valuation and growth prospects, although it acknowledged recent strategic moves and financial achievements.

According to Barclays, the downgrade reflects a shift in valuation methodology from enterprise value (EV) to free cash flow (FCF), resulting in a 19x EV/FCF ratio. This valuation is neither cheap nor expensive, but the bank believes there is no clear catalyst for a stock rerating.

The downgrade comes despite CCC Intelligent Solutions' recent financial milestones. The company reported strong second-quarter earnings, with revenue surpassing forecasts by $2 million and EBITDA exceeding projections by $4.5 million. Additionally, CCC Intelligent Solutions has made significant strides in managing its financial obligations by refinancing its term loan facility, extending its maturity, and reducing the interest rate.

In other recent news, CCC Intelligent Solutions completed the acquisition of ZyraTalk, an AI-powered customer engagement platform, to enhance its service offerings, particularly in its Home & Field Services vertical. This strategic move is expected to benefit other service sectors within the company.

Despite these positive developments, Barclays remains cautious about CCC Intelligent Solutions' growth prospects and ownership concentration, noting that private equity firms PSG and Silver Lake control more than 80% of the company's shares. This significant ownership stake could limit float and liquidity in the stock.