CCC Intelligent Solutions Holdings Inc. (NYSE:CCCS) is a leading provider of cloud-based software solutions tailored for the property and casualty insurance industry. The company's focus on enhancing the efficiency and effectiveness of insurance claims processes sets it apart in a competitive landscape that includes peers such as Alight, Inc. (ALIT), E2open Parent Holdings, Inc. (ETWO), Clearwater Analytics Holdings, Inc. (CWAN), Clarivate Plc (CLVT), and Paycor HCM, Inc. (PYCR).
In an in-depth financial analysis, CCCS's Return on Invested Capital (ROIC) is highlighted at 2.26%, juxtaposed with its Weighted Average Cost of Capital (WACC) at 8.20%. This results in a ROIC to WACC ratio of 0.28. This ratio is a critical indicator of the company's ability to generate returns above its cost of capital. Although CCCS's ratio suggests it is not achieving this benchmark, it still outperforms its peers in this metric.
Comparatively, Alight, Inc. (ALIT) reports a ROIC of -0.75% and a WACC of 12.13%, leading to a ROIC to WACC ratio of -0.06. E2open Parent Holdings, Inc. (ETWO) and Clearwater Analytics Holdings, Inc. (CWAN) present even lower ratios of -2.42 and -2.43, respectively, indicating significant challenges in surpassing their cost of capital. Clarivate Plc (CLVT) emerges as the highest among the peers with a ROIC to WACC ratio of 0.05, albeit still below 1, suggesting it is not generating returns above its cost of capital but is the best performer in this specific analysis. Paycor HCM, Inc. (PYCR) also faces a struggle with a negative ROIC to WACC ratio of -0.22.
In summary, while CCCS leads its peer group with a ROIC to WACC ratio of 0.28, indicating a relatively better utilization of capital, all companies in this analysis, including CCCS, exhibit ratios below 1. This underlines a common challenge among these firms in generating returns that exceed their cost of capital.
