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CCC Intelligent Solutions Holdings Inc. (NASDAQ:CCCS) announced strong profits, but the stock was stagnant. Our analysis suggests that shareholders have noticed something concerning in the numbers.
Check out our latest analysis for CCC Intelligent Solutions Holdings
In order to understand the potential for per share returns, it is essential to consider how much a company is diluting shareholders. As it happens, CCC Intelligent Solutions Holdings issued 8.8% more new shares over the last year. Therefore, each share now receives a smaller portion of profit. Per share metrics like EPS help us understand how much actual shareholders are benefitting from the company's profits, while the net income level gives us a better view of the company's absolute size. You can see a chart of CCC Intelligent Solutions Holdings' EPS by clicking here.
How Is Dilution Impacting CCC Intelligent Solutions Holdings' Earnings Per Share (EPS)?
CCC Intelligent Solutions Holdings was losing money three years ago. And even focusing only on the last twelve months, we don't have a meaningful growth rate because it made a loss a year ago, too. But mathematics aside, it is always good to see when a formerly unprofitable business come good (though we accept profit would have been higher if dilution had not been required). And so, you can see quite clearly that dilution is influencing shareholder earnings.
In the long term, if CCC Intelligent Solutions Holdings' earnings per share can increase, then the share price should too. But on the other hand, we'd be far less excited to learn profit (but not EPS) was improving. For that reason, you could say that EPS is more important that net income in the long run, assuming the goal is to assess whether a company's share price might grow.
That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.
Our Take On CCC Intelligent Solutions Holdings' Profit Performance
CCC Intelligent Solutions Holdings issued shares during the year, and that means its EPS performance lags its net income growth. Because of this, we think that it may be that CCC Intelligent Solutions Holdings' statutory profits are better than its underlying earnings power. The good news is that it earned a profit in the last twelve months, despite its previous loss. Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors. Obviously, we love to consider the historical data to inform our opinion of a company. But it can be really valuable to consider what other analysts are forecasting. So feel free to check out our free graph representing analyst forecasts.