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Here's How Guidewire (GWRE) Looks Just Ahead of Q2 Earnings

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Guidewire Software, Inc (GWRE - Free Report) is slated to report second-quarter fiscal 2022 results on Mar 8.

For the fiscal second quarter, Guidewire expects revenues of $195-$199 million. The Zacks Consensus Estimate for revenues is pegged at $197.5 million, indicating an increase of 9.7% on a year-over-year basis.

The Zacks Consensus Estimate for the bottom line is pegged at a loss of 11 cents per share, unchanged in the past 30 days. The company had reported earnings of 11 cents per share in the year-ago quarter.

Notably, the company beat estimates in all the last four quarters. The company has a trailing four-quarter earnings surprise of 319.5%, on average.

Guidewire Software, Inc. Price and EPS Surprise

 

Guidewire Software, Inc. Price and EPS Surprise

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

 

Factors Likely to Have Influenced Q2 Performance

Guidewire’s fiscal second-quarter performance is likely to gain from the pandemic-induced demand for cloud-based insurance software solutions. In the last reported quarter, cloud bookings represented more than 90% of deal activity and boosted the company’s annual recurring revenues (ARR).

ARR were $594 million as of Oct 31, 2021, compared with $582 million as of Jul 31, 2021. The company expects ARR between $613 million and $616 million for the quarter to be reported.

A solid uptick in multiple components of Guidewire’s InsurancePlatform, which included InsuranceSuite, digital, data and analytics, might have acted as a tailwind.

Healthy adoption witnessed in subscription-based InsuranceSuite Cloud offerings, in particular, is expected to have contributed to subscription and supported revenues in the to-be-reported quarter.

Synergies from the buyout of HazardHub (August 2021) are likely to have positively impacted top-line numbers. HazardHub provides extensive, national coverage for risks that destroy and damage property. The addition of HazardHub bolsters Gudewire’s portfolio, which will help expand the company’s presence in the P&C market.

The Zacks Consensus Estimate for subscription and support revenues is pegged at $80 million. The consensus mark for service revenues is pegged at $47.4 million and the same for license revenues is at $69 million.

Although increasing expenses on product enhancements, especially cloud infrastructure and marketing initiatives bode well over the long haul, it might have put pressure on margin expansion in the fiscal second quarter.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Guidewire 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.

Guidewire has an Earnings ESP of 0.00% and a Zacks Rank #3. 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 stocks that you may consider as our model shows that these have the right combination of elements to beat on earnings this season.

DICK'S Sporting Goods (DKS - Free Report) has an Earnings ESP of +3.5% and a Zacks Rank of 1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

DICK'S Sporting Goods is scheduled to release fourth-quarter fiscal 2021 results on Mar 8. The Zacks Consensus Estimate for earnings is pegged at $3.43 per share, suggesting an increase of 41.2% from the prior-year quarter’s levels. Shares of DKS have increased 62.5% in the past year.

Campbell Soup (CPB - Free Report) has an Earnings ESP of +0.6% and a Zacks Rank of 3 at present.

Campbell Soup is set to release second-quarter fiscal 2022 results on Mar 9. The Zacks Consensus Estimate for earnings is pegged at 68 cents per share, suggesting a decline of 19.1% from the prior-year quarter’s reported figure. Shares of CPB have increased 1.9% in the past year.

Dollar General (DG - Free Report) has an Earnings ESP of +0.7% and a Zacks Rank of 3.

Dollar General is scheduled to release fourth-quarter fiscal 2021 results on Mar 17. The Zacks Consensus Estimate for earnings is pegged at $2.56 per share, suggesting a decline of 2.3% from the year-ago quarter’s levels. Shares of DG returned 13.1% in the past year.

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