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Factors to Note Ahead of Guidewire's (GWRE) Q2 Earnings Release
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Guidewire Software, Inc (GWRE - Free Report) is slated to report second-quarter fiscal 2024 results on Mar 7.
Management expects revenues in the range of $237-$243 million. The Zacks Consensus Estimate is pegged at $240.9 million, suggesting a 3.6% increase from the prior-year levels.
The consensus estimate is pegged at 21 cents per share, unchanged in the past 30 days. GWRE reported a loss of 21 cents a year ago.
Guidewire’s performance is likely to have improved due to higher demand for cloud-based insurance software solutions. Guidewire Cloud continues to gain momentum, with seven cloud deals in the last reported quarter.
The company’s focus on enhancing the Guidewire Cloud platform with new capabilities is expected to boost sales of subscription-based solutions. We expect subscription revenues to be $113.2 million, up 31.6% year over year in the fiscal second quarter.
Continued momentum in data and analytics offerings is likely to have acted as a key growth factor. Synergies from the buyout of HazardHub are expected to have contributed to segmental performance. The company keeps fostering and expanding its network of partners, which includes SIs and solution providers, to drive sustained activity and greater value from the platform.
Improvement in the Subscription and Support segment’s gross margins is likely to have favored overall margin performance. Also, migration activity for InsuranceSuite Cloud is likely to have favored the company’s top-line performance. We expect the Subscription and Support segment’s revenues to be $130 million, up 23% year over year in the fiscal second quarter.
Weakness in global macroeconomic conditions and inflation are compelling to reduce expenses, especially for mid-scale and small-scale businesses, and are likely to have acted as headwinds. Increasing investments in product enhancements are expected to put pressure on margin expansion in the fiscal second quarter.
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.
The Gap (GPS - Free Report) has an Earnings ESP of +54.71% and a Zacks Rank #1 at present. GPS is set to report its fourth-quarter 2023 results on Mar 7. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for earnings is pegged at 20 cents per share, suggesting an increase of 126.6% from the prior-year quarter’s reported figure. The Gap’s shares have lost 8% year to date.
Dollar Tree (DLTR - Free Report) has an Earnings ESP of +0.53% and a Zacks Rank #3. DLTR is set to report its fourth-quarter 2023 results on Mar 13.
The Zacks Consensus Estimate for earnings is pegged at $2.67 per share, suggesting an increase of 30.9% from the prior-year quarter’s reported figure. DLTR’s shares have gained 4.9% year to date.
NIKE (NKE - Free Report) has an Earnings ESP of +5.21% and a Zacks Rank #3. NKE is set to report its third-quarter fiscal 2024 results on Mar 21.
The Zacks Consensus Estimate for earnings is pegged at 70 cents per share, suggesting a decrease of 11.4% from the prior-year quarter’s reported figure. NKE’s shares have lost 17% year to date.
Image: Bigstock
Factors to Note Ahead of Guidewire's (GWRE) Q2 Earnings Release
Guidewire Software, Inc (GWRE - Free Report) is slated to report second-quarter fiscal 2024 results on Mar 7.
Management expects revenues in the range of $237-$243 million. The Zacks Consensus Estimate is pegged at $240.9 million, suggesting a 3.6% increase from the prior-year levels.
The consensus estimate is pegged at 21 cents per share, unchanged in the past 30 days. GWRE reported a loss of 21 cents a year ago.
Guidewire Software, Inc. Price and EPS Surprise
Guidewire Software, Inc. price-eps-surprise | Guidewire Software, Inc. Quote
Factors at Play
Guidewire’s performance is likely to have improved due to higher demand for cloud-based insurance software solutions. Guidewire Cloud continues to gain momentum, with seven cloud deals in the last reported quarter.
The company’s focus on enhancing the Guidewire Cloud platform with new capabilities is expected to boost sales of subscription-based solutions. We expect subscription revenues to be $113.2 million, up 31.6% year over year in the fiscal second quarter.
Continued momentum in data and analytics offerings is likely to have acted as a key growth factor. Synergies from the buyout of HazardHub are expected to have contributed to segmental performance. The company keeps fostering and expanding its network of partners, which includes SIs and solution providers, to drive sustained activity and greater value from the platform.
Improvement in the Subscription and Support segment’s gross margins is likely to have favored overall margin performance. Also, migration activity for InsuranceSuite Cloud is likely to have favored the company’s top-line performance. We expect the Subscription and Support segment’s revenues to be $130 million, up 23% year over year in the fiscal second quarter.
Weakness in global macroeconomic conditions and inflation are compelling to reduce expenses, especially for mid-scale and small-scale businesses, and are likely to have acted as headwinds. Increasing investments in product enhancements are expected to put pressure on margin expansion in the fiscal second quarter.
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.
The Gap (GPS - Free Report) has an Earnings ESP of +54.71% and a Zacks Rank #1 at present. GPS is set to report its fourth-quarter 2023 results on Mar 7. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for earnings is pegged at 20 cents per share, suggesting an increase of 126.6% from the prior-year quarter’s reported figure. The Gap’s shares have lost 8% year to date.
Dollar Tree (DLTR - Free Report) has an Earnings ESP of +0.53% and a Zacks Rank #3. DLTR is set to report its fourth-quarter 2023 results on Mar 13.
The Zacks Consensus Estimate for earnings is pegged at $2.67 per share, suggesting an increase of 30.9% from the prior-year quarter’s reported figure. DLTR’s shares have gained 4.9% year to date.
NIKE (NKE - Free Report) has an Earnings ESP of +5.21% and a Zacks Rank #3. NKE is set to report its third-quarter fiscal 2024 results on Mar 21.
The Zacks Consensus Estimate for earnings is pegged at 70 cents per share, suggesting a decrease of 11.4% from the prior-year quarter’s reported figure. NKE’s shares have lost 17% year to date.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.