U.S. Markets closed
  • S&P 500

    3,585.62
    -54.85 (-1.51%)
     
  • Dow 30

    28,725.51
    -500.10 (-1.71%)
     
  • Nasdaq

    10,575.62
    -161.89 (-1.51%)
     
  • Russell 2000

    1,664.72
    -10.21 (-0.61%)
     
  • Crude Oil

    79.74
    -1.49 (-1.83%)
     
  • Gold

    1,668.30
    -0.30 (-0.02%)
     
  • Silver

    19.01
    +0.30 (+1.62%)
     
  • EUR/USD

    0.9801
    -0.0018 (-0.1862%)
     
  • 10-Yr Bond

    3.8040
    +0.0570 (+1.52%)
     
  • Vix

    31.62
    -0.22 (-0.69%)
     
  • GBP/USD

    1.1166
    +0.0043 (+0.3841%)
     
  • USD/JPY

    144.7200
    +0.2770 (+0.1918%)
     
  • BTC-USD

    19,328.26
    -365.52 (-1.86%)
     
  • CMC Crypto 200

    443.49
    +0.06 (+0.01%)
     
  • FTSE 100

    6,893.81
    +12.22 (+0.18%)
     
  • Nikkei 225

    25,937.21
    -484.84 (-1.83%)
     

Factors to Note Ahead of Guidewire's (GWRE) Q4 Earnings

·4 min read

Guidewire Software, Inc GWRE is slated to report fourth-quarter fiscal 2022 results on Sep 6.

For the fiscal fourth quarter, Guidewire expects revenues of $226-$232 million. The Zacks Consensus Estimate for revenues is pegged at $229.5 million, almost in line with the prior-year quarter’s levels.

The Zacks Consensus Estimate for the bottom line is pegged at a loss of 4 cents per share, unchanged in the past 30 days. The company reported earnings of 37 cents per share in the year-ago quarter.

Notably, the company beat estimates in all the last four quarters. The company has a trailing four-quarter earnings surprise of 25.9%, on average.

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 Q4 Performance

Guidewire’s fiscal fourth-quarter performance is likely to gain from the higher demand for cloud-based insurance software solutions. In the last reported quarter, Guidewire’s cloud constituted over 90% of the company’s bookings. The company is witnessing strong demand from Tier 1 and Tier 2 insurers for its cloud platform.

A solid uptick in multiple components of Guidewire’s InsurancePlatform, which included InsuranceSuite, digital, data and analytics, might 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 numbers.

Annual recurring revenues (ARR) were $637 million as of Apr 30, 2022, up 18% year-over-year and 17% on a constant-currency basis, driven by new sales and deal ramps. The company expects ARR between $668 million and $674 million for the quarter to be reported.

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 bolsters Gudewire’s portfolio, which will help expand the company’s presence in the P&C market.

The Zacks Consensus Estimate for subscription and support revenues is pegged at $90 million. The consensus mark for service revenues is pegged at $52 million and the same for license revenues is at $88 million.

Although increasing expenses on product enhancements, especially cloud infrastructure and marketing initiatives, bode well over the long haul, it might have put pressure on margin expansion in the fiscal fourth 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.

Guidewire has an Earnings ESP of 21.05% 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.

Dave & Buster's Entertainment PLAY has an Earnings ESP of +2.97% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dave & Buster's is set to release second-quarter fiscal 2022 results on Sep 7. The Zacks Consensus Estimate for earnings is pegged at earnings of $1.01 per share compared with $1.07 reported in the year-ago quarter. Shares of PLAY have increased 14.6% in the past year.

Casey General Stores CASY has an Earnings ESP of +11.33% and a Zacks Rank of 3 at present.

Casey General Stores is scheduled to release first-quarter fiscal 2023 results on Sep 7. The Zacks Consensus Estimate for earnings is pegged at $3.84 per share, indicating an increase of 20.4%. Shares of CASY have increased 4.4% in the past year.

ABM Industries ABM has an Earnings ESP of +0.22% and a Zacks Rank of 2 at present.

ABM Industries is scheduled to release third-quarter fiscal 2022 results on Sep 9. The Zacks Consensus Estimate for earnings is pegged at 91 cents per share, suggesting an increase of 1.1% from the prior-year quarter’s levels. Shares of ABM have declined 7.6% in the past year.

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


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
ABM Industries Incorporated (ABM) : Free Stock Analysis Report
 
Guidewire Software, Inc. (GWRE) : Free Stock Analysis Report
 
Casey's General Stores, Inc. (CASY) : Free Stock Analysis Report
 
Dave & Buster's Entertainment, Inc. (PLAY) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research