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Guidewire (GWRE) to Post Q2 Earnings: What's in Store?
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Guidewire Software, Inc (GWRE - Free Report) is slated to report second-quarter fiscal 2023 results on Mar 6.
The company expects revenues of $221-$226 million. The Zacks Consensus Estimate is pegged at $222.1 million, suggesting an 8.6% increase from the prior-year quarter’s reported level.
The Zacks Consensus Estimate is pegged at a loss of 4 cents per share, unchanged in the past 30 days. The company incurred a loss of 6 cents in the year-ago reported quarter.
Notably, the company beat estimates in all the last four quarters. GWRE has a trailing four-quarter earnings surprise of 75.8%, on average.
Guidewire Software, Inc. Price, Consensus and EPS Surprise
Guidewire’s performance is likely to have gained from higher demand for cloud-based insurance software solutions. The company has been witnessing strong demand from Tier 1 and Tier 2 insurers for its cloud platform.
Driven by new sales and deal ramps, annual recurring revenues (ARR) were $673 million as of Oct 31, 2022, up 13.3% year over year. The company expects ARR between $695 million and $700 million for the quarter to be reported.
A solid uptick in multiple components of Guidewire’s InsurancePlatform, including InsuranceSuite, digital, data and analytics, is anticipated to have acted as a tailwind. Healthy adoption witnessed in subscription-based InsuranceSuite Cloud offerings is expected to have contributed to subscription and supported revenues in the to-be-reported quarter. Also, the migration activity for InsuranceSuite Cloud is likely to have favored the company’s top-line performance.
Continued momentum in data and analytics offerings is likely to have acted as a key growth factor. Synergies from the buyout of HazardHub (August 2021) are likely to have contributed to this segment’s performance.
HazardHub provides extensive national coverage for risks that destroy and damage property. The addition of HazardHub is likely to have bolstered Guidewire’s portfolio, expanding the company’s presence in the P&C market.
Although increasing expenses on product enhancements, especially cloud infrastructure and marketing initiatives, bode well over the long haul, it is likely to have put pressure on margin expansion in fiscal second quarter. Weakness in global macroeconomic conditions is compelling spending cutbacks especially for mid and small-scale businesses, which is likely to have acted as a headwind.
What Our Model Says
According to the Zacks model, 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. But that’s not the case here.
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.
Casey's General Stores is set to release third-quarter fiscal 2023 results on Mar 7. The Zacks Consensus Estimate for earnings is pegged at $1.79 per share, suggesting a 4.7% increase from the prior-year quarter’s reported figure. Shares of CASY have gained 10.9% in the past year.
Ulta Beauty (ULTA - Free Report) has an Earnings ESP of +8.53% and a Zacks Rank of 2 at present.
Ulta Beauty is set to release fourth-quarter 2022 results on Mar 9. The Zacks Consensus Estimate for the bottom line is pegged at $5.53 per share, suggesting a 2.2% increase from the prior-year quarter’s reported figure. Shares of ULTA have increased 42% in the past year.
The Gap, Inc (GPS - Free Report) has an Earnings ESP of +25.06% and a Zacks Rank of 3.
Gap is scheduled to release fourth-quarter fiscal 2022 results on Mar 9. The Zacks Consensus Estimate is pegged at a loss of 59 cents per share. Shares of GPS have decreased 10.3% in the past year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Guidewire (GWRE) to Post Q2 Earnings: What's in Store?
Guidewire Software, Inc (GWRE - Free Report) is slated to report second-quarter fiscal 2023 results on Mar 6.
The company expects revenues of $221-$226 million. The Zacks Consensus Estimate is pegged at $222.1 million, suggesting an 8.6% increase from the prior-year quarter’s reported level.
The Zacks Consensus Estimate is pegged at a loss of 4 cents per share, unchanged in the past 30 days. The company incurred a loss of 6 cents in the year-ago reported quarter.
Notably, the company beat estimates in all the last four quarters. GWRE has a trailing four-quarter earnings surprise of 75.8%, on average.
Guidewire Software, Inc. Price, Consensus and EPS Surprise
Guidewire Software, Inc. price-consensus-eps-surprise-chart | Guidewire Software, Inc. Quote
Factors Likely to Have Influenced Q2 Performance
Guidewire’s performance is likely to have gained from higher demand for cloud-based insurance software solutions. The company has been witnessing strong demand from Tier 1 and Tier 2 insurers for its cloud platform.
Driven by new sales and deal ramps, annual recurring revenues (ARR) were $673 million as of Oct 31, 2022, up 13.3% year over year. The company expects ARR between $695 million and $700 million for the quarter to be reported.
A solid uptick in multiple components of Guidewire’s InsurancePlatform, including InsuranceSuite, digital, data and analytics, is anticipated to have acted as a tailwind. Healthy adoption witnessed in subscription-based InsuranceSuite Cloud offerings is expected to have contributed to subscription and supported revenues in the to-be-reported quarter. Also, the migration activity for InsuranceSuite Cloud is likely to have favored the company’s top-line performance.
Continued momentum in data and analytics offerings is likely to have acted as a key growth factor. Synergies from the buyout of HazardHub (August 2021) are likely to have contributed to this segment’s performance.
HazardHub provides extensive national coverage for risks that destroy and damage property. The addition of HazardHub is likely to have bolstered Guidewire’s portfolio, expanding the company’s presence in the P&C market.
Although increasing expenses on product enhancements, especially cloud infrastructure and marketing initiatives, bode well over the long haul, it is likely to have put pressure on margin expansion in fiscal second quarter. Weakness in global macroeconomic conditions is compelling spending cutbacks especially for mid and small-scale businesses, which is likely to have acted as a headwind.
What Our Model Says
According to the Zacks model, 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. But that’s not the case here.
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.
Casey's General Stores (CASY - Free Report) has an Earnings ESP of +6.37% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Casey's General Stores is set to release third-quarter fiscal 2023 results on Mar 7. The Zacks Consensus Estimate for earnings is pegged at $1.79 per share, suggesting a 4.7% increase from the prior-year quarter’s reported figure. Shares of CASY have gained 10.9% in the past year.
Ulta Beauty (ULTA - Free Report) has an Earnings ESP of +8.53% and a Zacks Rank of 2 at present.
Ulta Beauty is set to release fourth-quarter 2022 results on Mar 9. The Zacks Consensus Estimate for the bottom line is pegged at $5.53 per share, suggesting a 2.2% increase from the prior-year quarter’s reported figure. Shares of ULTA have increased 42% in the past year.
The Gap, Inc (GPS - Free Report) has an Earnings ESP of +25.06% and a Zacks Rank of 3.
Gap is scheduled to release fourth-quarter fiscal 2022 results on Mar 9. The Zacks Consensus Estimate is pegged at a loss of 59 cents per share. Shares of GPS have decreased 10.3% in the past year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.