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Guidewire (GWRE) Cloud Continues to Witness Healthy Momentum
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Guidewire Software, Inc’s (GWRE - Free Report) cloud platform is witnessing significant traction. Recently, United Automobile Insurance Company (“UAIC”) successfully migrated Guidewire ClaimCenter from an on-premise environment to GWRE’s Cloud in order to boost its claims and related IT operations.
The migration of Guidewire ClaimCenter to its Cloud forms part of UAIC’s multi-phase digital transformation strategy. UAIC has implemented ClaimCenter on Guidewire’s Cloud for its commercial and personal automobile lines of businesses.
Prior to this, Trygg-Hansa Forsakring had selected ClaimCenter on Guidewire Cloud to boost the efficiency of its claim operations. Trygg-Hansa is the Swedish branch of Tryg Forsikring A/S, one of the largest providers of non-life insurance services in Scandinavia. Also, leading property and casualty (P&C) insurer — Encova Insurance — selected Guidewire InsuranceSuite on GWRE’s Cloud to boost its core operations.
Guidewire is a provider of software solutions for P&C insurers. Its cloud platform boasts a trusted infrastructure with modular and interconnected cloud services to aid insurers in upgrading their core operations. The platform also has scalability as well as the ability to embed analytics and core workflows. The company updates its cloud platform thrice a year to keep the system agile and nimble amid a constantly evolving P&C industry.
The company's focus on enhancing the Guidewire Cloud platform with new capabilities, including digital frameworks, automation, tooling and other cloud services, is expected to boost sales of subscription-based solutions in the long haul.
The focus on cloud strategy has been paying off for Guidewire, as evidenced by increasing sales. The company reported revenues of $240.9 million, rising 4% year over year. The figure was in line with the Zacks Consensus Estimate.
In the last reported quarter, management highlighted that it secured 11 cloud deals. Out of these 11 deals, 10 were for its InsuranceSuite cloud offering. Guidewire’s InsuranceSuite Cloud comprises three primary applications, namely PolicyCenter Cloud, BillingCenter Cloud and ClaimCenter Cloud.
Guidewire also remains focused on driving cloud operations efficiency to boost cloud margins. The subscription and support segment’s gross margin rose to 65.1% from 57.4% on a year-over-year basis in the second quarter of fiscal 2024 due to increased cloud infrastructure efficiency.
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.
However, as the company invests more in its ecosystem of implementation partners, service revenues are getting affected. The company has lowered its 2024 revenue guidance to $957 million and $967 million compared with the previous guidance of $976-$986 million, owing to a downward adjustment to its services revenue expectations.
Guidewire currently carries a Zacks Rank #3 (Hold). Shares of the company have gained 48.8% in the past year compared with the sub-industry’s growth of 22.8%.
The Zacks Consensus Estimate for MANH’s 2024 EPS has increased 3.6% in the past 60 days to $3.76. Manhattan Associates’ earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 27.6%. Shares of MANH have surged 66.1% in the past year.
The Zacks Consensus Estimate for SNPS’ fiscal 2024 EPS stands at $13.38. The long-term earnings growth rate is 17.5%. SNPS’ earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 4.1%. Shares of SNPS have soared 52.9% in the past year.
The Zacks Consensus Estimate for Microsoft’s fiscal 2024 EPS is pegged at $11.63, indicating growth of 18.6% from the year-ago levels. MSFT’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 8.8%. The long-term earnings growth rate is 16.2%. Shares of MSFT have rallied 50.2% in the past year.
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Guidewire (GWRE) Cloud Continues to Witness Healthy Momentum
Guidewire Software, Inc’s (GWRE - Free Report) cloud platform is witnessing significant traction. Recently, United Automobile Insurance Company (“UAIC”) successfully migrated Guidewire ClaimCenter from an on-premise environment to GWRE’s Cloud in order to boost its claims and related IT operations.
The migration of Guidewire ClaimCenter to its Cloud forms part of UAIC’s multi-phase digital transformation strategy. UAIC has implemented ClaimCenter on Guidewire’s Cloud for its commercial and personal automobile lines of businesses.
Prior to this, Trygg-Hansa Forsakring had selected ClaimCenter on Guidewire Cloud to boost the efficiency of its claim operations. Trygg-Hansa is the Swedish branch of Tryg Forsikring A/S, one of the largest providers of non-life insurance services in Scandinavia. Also, leading property and casualty (P&C) insurer — Encova Insurance — selected Guidewire InsuranceSuite on GWRE’s Cloud to boost its core operations.
Guidewire is a provider of software solutions for P&C insurers. Its cloud platform boasts a trusted infrastructure with modular and interconnected cloud services to aid insurers in upgrading their core operations. The platform also has scalability as well as the ability to embed analytics and core workflows. The company updates its cloud platform thrice a year to keep the system agile and nimble amid a constantly evolving P&C industry.
Guidewire Software, Inc. Price and Consensus
Guidewire Software, Inc. price-consensus-chart | Guidewire Software, Inc. Quote
The company's focus on enhancing the Guidewire Cloud platform with new capabilities, including digital frameworks, automation, tooling and other cloud services, is expected to boost sales of subscription-based solutions in the long haul.
The focus on cloud strategy has been paying off for Guidewire, as evidenced by increasing sales. The company reported revenues of $240.9 million, rising 4% year over year. The figure was in line with the Zacks Consensus Estimate.
In the last reported quarter, management highlighted that it secured 11 cloud deals. Out of these 11 deals, 10 were for its InsuranceSuite cloud offering. Guidewire’s InsuranceSuite Cloud comprises three primary applications, namely PolicyCenter Cloud, BillingCenter Cloud and ClaimCenter Cloud.
Guidewire also remains focused on driving cloud operations efficiency to boost cloud margins. The subscription and support segment’s gross margin rose to 65.1% from 57.4% on a year-over-year basis in the second quarter of fiscal 2024 due to increased cloud infrastructure efficiency.
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.
However, as the company invests more in its ecosystem of implementation partners, service revenues are getting affected. The company has lowered its 2024 revenue guidance to $957 million and $967 million compared with the previous guidance of $976-$986 million, owing to a downward adjustment to its services revenue expectations.
Guidewire currently carries a Zacks Rank #3 (Hold). Shares of the company have gained 48.8% in the past year compared with the sub-industry’s growth of 22.8%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks worth consideration in the broader technology space are Manhattan Associates (MANH - Free Report) , Synopsys (SNPS - Free Report) and Microsoft (MSFT - Free Report) . While MANH and SNPS sport a Zacks Rank #1 (Strong Buy) each, MSFT carries a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for MANH’s 2024 EPS has increased 3.6% in the past 60 days to $3.76. Manhattan Associates’ earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 27.6%. Shares of MANH have surged 66.1% in the past year.
The Zacks Consensus Estimate for SNPS’ fiscal 2024 EPS stands at $13.38. The long-term earnings growth rate is 17.5%. SNPS’ earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 4.1%. Shares of SNPS have soared 52.9% in the past year.
The Zacks Consensus Estimate for Microsoft’s fiscal 2024 EPS is pegged at $11.63, indicating growth of 18.6% from the year-ago levels. MSFT’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 8.8%. The long-term earnings growth rate is 16.2%. Shares of MSFT have rallied 50.2% in the past year.