Guidewire Software, Inc GWRE is slated to report first-quarter fiscal 2025 results on Dec. 5.

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Management expects revenues in the range of $251-$257 million. The Zacks Consensus Estimate is pegged at $254.3 million, indicating a 22.6% increase from the prior-year quarter.

The consensus estimate for the bottom line is pegged at 30 cents, unchanged in the past 60 days. GWRE reported breakeven earnings in the year-ago period.

GWRE has a trailing four-quarter earnings surprise of 84.6%, on average. Shares of GWRE have gained 86.1% in the past year compared with the sub-industry's growth of 23.4%.

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Factors at Play for GWRE

Guidewire’s performance is likely to have benefited from continued momentum in Guidewire Cloud. Solid deal volume across all tiers and increasing sales activity, especially in Asia Pacific and EMEA are other tailwinds. The company has been expanding its network of partners (which includes SIs and solution providers) to drive sustained activity and greater value from the platform.

Guidewire’s InsuranceSuite Cloud comprises three primary applications, namely PolicyCenter Cloud, BillingCenter Cloud and ClaimCenter Cloud. In the last reported quarter, it won 16 deals, taking the total cloud wins to 42 for the year. Out of these deals, 13 were for InsuranceSuite Cloud in the quarter, bringing the total deals for the segment to 37 for the fiscal year. It also won three InsuranceNow deals in the fourth quarter. 

The company’s focus on enhancing the Guidewire Cloud platform with new capabilities is expected to have boosted sales of subscription-based solutions. Management expects subscription and support revenues of $167 million with services revenues of $50 million.

Guidewire Software, Inc. Price and EPS Surprise

Guidewire Software, Inc. price-eps-surprise | Guidewire Software, Inc. Quote

GWRE’s efforts to drive cloud operations efficiency to boost cloud margins remain an additional tailwind. The company expects non-GAAP operating income to be in the range of $18-$24 million. 

However, as the company invests more in its ecosystem of implementation partners, service revenues are likely to have been affected. License revenues are likely to have been affected owing to the migration of on-premise customers to the cloud. Also, management expects “typical seasonality” to weigh on annual recurring revenues (ARR) sequential growth in the to be reported quarter. For the first quarter of fiscal 2025, ARR is anticipated between $869 million and $874 million.

Increasing investments in product enhancements along with weakness in global macroeconomic conditions and inflation remain concerning.

What Our Model Says About GWRE

Our proven model does not predict an earnings beat for GWRE this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here.

GWRE has an Earnings ESP of 0.00% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some better-ranked stocks that you may consider, as our model shows that these have the right combination of elements to beat on earnings this season.

Torrid Holdings Inc. CURV is set to release quarterly numbers on Dec. 3. It currently has an Earnings ESP of +23.08% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for CURV’s to-be-reported quarter’s EPS and revenues is pegged at 3 cents and $282.8 million, respectively. Shares of CURV have lost 25.1% in the past year.

Rubrik, Inc. RBRK presently has an Earnings ESP of +0.42% and a Zacks Rank #2. RBRK is scheduled to report quarterly numbers on Dec. 5. The Zacks Consensus Estimate for Rubrik’s to-be-reported quarter’s bottom line is pegged at a loss of 40 cents. The same for revenues is pegged at $217.6 million. Shares of RBRK have gained 37.3% in the past year.

Casey's General Stores, Inc. CASY has an Earnings ESP of +1.50% and a Zacks Rank #3 at present. CASY is scheduled to report quarterly figures on Dec. 9.  The Zacks Consensus Estimate for CASY’s to-be-reported quarter’s earnings and revenues is pegged at $4.24 per share and $4.01 billion, respectively. Shares of CASY have increased 53.2% in the past year.

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Guidewire Software, Inc. (GWRE) : Free Stock Analysis Report

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