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Guidewire (GWRE) to Report Q3 Earnings: What's in Store?

Guidewire Software, Inc GWRE is slated to report third-quarter fiscal 2023 results on Jun 1.

Management expects revenues in the range of $211-$216 million. The Zacks Consensus Estimate is pegged at $214.1 million, suggesting an 8.4% increase from the prior-year quarter’s reported level.

The consensus estimate is pegged at a loss of 13 cents per share, unchanged in the past 30 days. GWRE incurred a loss of 26 cents in the year-ago reported quarter.

Guidewire Software, Inc. Price and EPS Surprise

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 Q3 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 $707 million as of Jan 31, up 14% on a reported basis and 17% on constant currency basis, respectively, year over year. Management expects ARR to be between $715 million and $720 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 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.

Weakness in global macroeconomic conditions is compelling spending cutbacks especially for mid and small-scale businesses, and is likely to have acted as a headwind. Increasing investments on product enhancements are expected are likely to have put pressure on margin expansion in fiscal third 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.

Macy’s M has an Earnings ESP of +2.81% and presently carries a Zacks Rank #3. M is scheduled to release quarterly numbers on Jun 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for M’s to-be-reported quarter’s earnings is pegged at 46 cents per share. The consensus estimate is pegged at $5.11 billion for revenues. The stock has lost 38.8% in the past year.

Zscaler ZS has an Earnings ESP of +4.47% and currently carries a Zacks Rank #3. ZS will release quarterly numbers on Jun 1.

The Zacks Consensus Estimate for ZS’ to-be-reported quarter’s earnings is pegged at 42 cents per share. For revenues, the consensus estimate is pegged at $410.7 million. The stock has declined 18.4% in the past year.

Lululemon Athletica LULU has an Earnings ESP of +0.24% and carries a Zacks Rank #3, at present. LULU is slated to release quarterly numbers on Jun

The Zacks Consensus Estimate is pegged at earnings of $1.97 per share. The consensus estimate for revenues is pegged at $1.92 billion. The stock has gained 15.9% in the past year.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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Zscaler, Inc. (ZS) : Free Stock Analysis Report

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