Why TIC Solutions Remains a High-Conviction Bet for Institutional Investors Despite a 20% Stock Decline

Institutional investors are often the barometers of long-term value, and their recent moves in TIC Solutions (NYSE: TIC) signal a compelling case for strategic optimism. Despite a 20% decline in the stock year-to-date, major stakeholders like Permian Investment Partners and Progeny 3 have increased their holdings, betting on the company's transformation and growth trajectory. This article unpacks why TIC remains a high-conviction play, even amid near-term volatility.

Institutional Conviction Amid Volatility

Permian Investment Partners and Progeny 3 have both deepened their stakes in TIC Solutions, reflecting confidence in its strategic repositioning. Progeny 3 added 255,800 shares in Q3 2025, boosting its position to $203.1 million-10.5% of its assets under management-and making TIC its second-largest holding after Cameco Corp. Meanwhile, Permian Investment Partners increased its stake by 11.96% in shares, holding 9.69 million shares as of October 2025, or 4.83% of TIC's equity according to data. Notably, while Permian reduced its portfolio allocation to TIC by 13.18% over the quarter, the firm's decision to buy more shares at lower prices underscores its belief in the stock's undervaluation.

This duality-reducing relative portfolio weight while increasing absolute ownership-highlights a classic "buy the dip" strategy. As one analyst noted, such moves often indicate that institutional investors view short-term price declines as opportunities to capitalize on long-term potential.

Strategic Transformation: The Catalyst for Growth

TIC Solutions' strategic overhaul is central to this optimism. The company is integrating Acuren and NV5, two cybersecurity and compliance-focused firms, to create a unified platform aimed at accelerating synergies and driving compliance-driven growth. Management has emphasized that this combination strengthens TIC's ability to serve clients in highly regulated industries, such as healthcare and finance, where demand for cybersecurity solutions is surging.

The rebranding effort is not just symbolic; it reflects a tangible shift toward higher-margin services. For instance, TIC's Q3 2025 net loss narrowed to $13.89 million, a significant improvement from prior-year losses. While the company still reports a negative EPS of -0.25, analysts project earnings growth of 123.79% annually over the next five years, driven by the integration's cost efficiencies and expanded service offerings according to projections.

Financial Guidance and Valuation: A Mispriced Opportunity?

TIC's full-year 2025 revenue guidance of $1.53 billion to $1.565 billion further reinforces its growth narrative according to forecasts. This aligns with broader analyst forecasts of 28.6% annual revenue growth, a rate that, if sustained, would position TIC as a standout performer in its sector.

Valuation metrics also suggest the stock is attractively priced. Simply Wall St's analysis estimates TIC's fair value at $15.80, implying a 29.4% upside from its recent closing price of $11.16 according to analysis. Another model from the same firm pegs fair value at $13.90, indicating a 31.4% undervaluation according to valuation data. While TIC's price-to-sales ratio of 1.8x exceeds the industry average of 1.3x, this premium is justified by its high-growth trajectory and the potential for margin expansion post-integration according to industry analysis.

The Long Game: Why Institutions Are Staying the Course

The recent 20% stock decline, though painful for short-term traders, has created an entry point for investors focused on long-term value. Permian and Progeny 3's actions suggest they see TIC's challenges as temporary, tied to integration costs and market skepticism about its profitability timeline. However, the narrowing losses, robust revenue guidance, and strategic clarity around its compliance-driven model provide a strong foundation for recovery.

Moreover, TIC's institutional ownership patterns mirror those of past turnaround plays. For example, when companies like VMware or Snowflake faced similar volatility during integration phases, patient capital from top-tier investors often preceded significant share price rebounds. TIC's current position-undervalued by key metrics, with a clear strategic vision-fits this mold.

Conclusion

TIC Solutions' 20% stock decline may seem alarming, but it masks a company in the midst of a strategic rebirth. The increased stakes by Permian Investment Partners and Progeny 3, coupled with strong financial guidance and favorable valuation metrics, paint a picture of an undervalued asset with substantial upside. For institutional investors with a multi-year horizon, TIC represents a rare combination of strategic clarity, operational momentum, and mispriced potential.