Guidewire Software, Inc. GWRE is slated to report fourth-quarter fiscal 2024 results on Sept. 5.
Management expects revenues in the range of $279-$287 million. The Zacks Consensus Estimate is pegged at $283.2 million, indicating a 4.9% increase from the prior-year quarter.
The consensus estimate for the bottom line is pegged at 52 cents, unchanged in the past 60 days. GWRE reported earnings of 74 cents per share in the year-ago period.
GWRE has a trailing four-quarter earnings surprise of 109.2%, on average. Shares of GWRE have gained 36.4% in the past year compared with the sub-industry's growth of 13.4%.
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Factors at Play for GWRE
Guidewire’s performance is likely to have benefited from higher demand for cloud-based insurance software solutions amid solid Tier-1 deal volume and increasing migration activity, especially in Asia Pacific. 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.
In the last reported quarter, it won eight deals. Management highlighted that InsuranceSuite cloud wins now stand at 24 for the year-to-date period, representing a 33% increase from the same period in the last fiscal year. Guidewire’s InsuranceSuite Cloud comprises three primary applications, namely PolicyCenter Cloud, BillingCenter Cloud and ClaimCenter Cloud.
The company’s focus on enhancing the Guidewire Cloud platform with new capabilities is expected to have boosted sales of subscription-based solutions. We expect subscription revenues to be $130.8 million, up 33.4% year over year. For the fiscal year, our estimate for subscription revenues is $474 million, up 34.6% year over year.
Management’s efforts to drive cloud operations efficiency to boost cloud margins remain an additional tailwind. The company expects non-GAAP operating income between $43 million and $51 million for the fiscal fourth quarter. For the fiscal year, non-GAAP operating income is estimated between $94 million and $102 million.
Guidewire Software, Inc. Price and EPS Surprise
Guidewire Software, Inc. price-eps-surprise | Guidewire Software, Inc. Quote
Management raised its guidance for fiscal 2024 owing to strong pipeline activity. The company expects total revenues between $968 million and $976 million compared with the previous guidance of $957-$967 million. ARR is now expected to be in the range of $856-$864 million (previously projected range: $852-$862 million).
However, as the company invests more in its ecosystem of implementation partners, service revenues are likely to have been affected. Increasing investments in product enhancements along with weakness in global macroeconomic conditions and inflation, remain concerning.
What Our Model Says
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 #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 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.
DICK'S Sporting Goods, Inc. DKS has an Earnings ESP of +3.05% and is set to announce quarterly figures on Sept. 4. DKS currently has a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for DKS’ to-be-reported quarter’s earnings and revenues is pegged at $3.77 per share and $3.43 billion, respectively. Shares of DKS have risen 61.3% in the past year.
Casey's General Stores, Inc. CASY presently has an Earnings ESP of +0.21% and a Zacks Rank #3. CASY is slated to release quarterly numbers on Sept. 4. The Zacks Consensus Estimate for CASY’s to-be-reported quarter’s earnings and revenues is pegged at $4.54 per share and $4.11 billion, respectively. Shares of CASY have gained 31.9% in the past year.
FedEx Corporation FDX currently has an Earnings ESP of +1.56% and a Zacks Rank #3. FDX is scheduled to report quarterly earnings on Sept. 19. The Zacks Consensus Estimate for FDX’s to-be-reported quarter’s earnings and revenues is pegged at $4.92 per share and $22.2 billion, respectively. Shares of FDX have surged 18.1% in the past year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>DICK'S Sporting Goods, Inc. (DKS) : Free Stock Analysis Report
FedEx Corporation (FDX) : Free Stock Analysis Report
Guidewire Software, Inc. (GWRE) : Free Stock Analysis Report
Casey's General Stores, Inc. (CASY) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
