This SaaS Stock Is Down 45% From Its Peak but Just Became a $12.5 Million Bet

Massachusetts-based TFJ Management upped its stake in CCC Intelligent Solutions Holdings Inc., adding more than 590,000 shares and boosting its holding to approximately $12.46 million, according to a November 13 filing.

What Happened

According to a filing with the U.S. Securities and Exchange Commission dated November 13, TFJ Management added to its position in CCC Intelligent Solutions Holdings Inc. The fund reported owning nearly 1.4 million shares at quarter-end, reflecting a market value of $12.46 million. This addition brought CCC to 8.39% of TFJ’s reportable equity assets.

What Else to Know

Top holdings after the filing:

• NASDAQ: APP: $39.15 million (26.4% of AUM)
• NYSE: CPNG: $25.14 million (16.9% of AUM)
• NYSE: KAR: $17.80 million (12.0% of AUM)
• NASDAQ: CCC: $12.46 million (8.4% of AUM)
• NYSE: HGV: $11.13 million (7.5% of AUM)

As of Friday, CCC shares were priced at $7.90, down 33% over the past year and well underperforming the S&P 500, which is up 16.5% in the same period.

Company Overview

Company Snapshot

• CCC Intelligent Solutions offers a cloud-based SaaS platform supporting digital workflow, estimating, claims, and repair management solutions for the property and casualty insurance sector.
• The company serves insurance carriers, automotive repair shops, OEMs, parts suppliers, and related ecosystem participants in the United States and China.
• It leverages artificial intelligence and cloud technology to streamline operations and facilitate commerce across a complex network of industry partners.

CCC Intelligent Solutions Holdings Inc. operates as a SaaS provider for the property and casualty insurance economy. The company leverages artificial intelligence and cloud technology to streamline workflows and facilitate commerce across a complex network of insurers, repairers, and automotive partners. CCC provides mission-critical solutions to key stakeholders in the insurance and automotive value chains.

Foolish Take

What matters for long-term investors is not the recent price action, but the size and persistence of this position. This is not a toe dip. At more than 8% of reported assets, this is now one of the fund’s core holdings, sitting alongside a handful of high-conviction names. That context matters because it suggests the volatility is not scaring the manager away. It is part of the thesis.

The disconnect is obvious in the numbers. In the third quarter, CCC Intelligent Solutions delivered revenue of $267.1 million, up 12% year over year, while adjusted EBITDA rose to $110.1 million, representing a 41% margin. Free cash flow reached $78.6 million for the quarter, and management lifted full-year guidance to as much as $1.056 billion in revenue and $428 million in adjusted EBITDA. The company also repurchased $44.9 million of stock during the quarter and has already used more than $217 million of its $300 million authorization year to date.

For patient investors, this is a stock the market cannot seem to agree on, but the business underneath continues to compound. Funds willing to sit through the swings are effectively betting that recurring revenue, entrenched customers, and cash generation eventually matter more than sentiment.

Glossary

13F assets under management: The total value of securities a fund manager reports quarterly to the SEC on Form 13F.
Stake: The ownership interest or investment a fund or individual holds in a company.
Position: The amount of a particular security or asset held by an investor or fund.
Market value: The current total worth of an investment based on its latest trading price.
Reportable holdings: Securities that institutional investors must disclose in regulatory filings due to size or type.
Alpha: A measure of an investment's performance compared to a benchmark, showing value added or lost.
SaaS (Software as a Service): A software delivery model where applications are accessed online rather than installed locally.
Property and casualty insurance: Insurance covering property loss and liability for accidents, injuries, or damage to others.
OEM (Original Equipment Manufacturer): A company that produces parts or equipment used in another company's end products.
Mission-critical: Essential systems or processes whose failure would severely impact business operations.
Value chain: The full range of activities involved in creating and delivering a product or service.
TTM: The 12-month period ending with the most recent quarterly report.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool recommends Coupang. The Motley Fool has a disclosure policy.