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Guidewire (GWRE) Strengthens PartnerConnect Alliance Program

Zacks Equity Research

Guidewire Software, Inc. GWRE recently announced that Larsen & Toubro Infotech (or LTI) is joining the Guidewire PartnerConnect alliance program. Per the press release, LTI is roped in as a “Consulting alliance member at the Select level for the Americas.”

Notably, the latest partner to join PartnerConnect has significant exposure to Guidewire’s InsurancePlatform suite of products, which is a positive. As a consulting partner, LTI will aid insurers to design and deploy business transforming strategies that reduce time-to-market considerably.

In general, the integration accelerators developed by consulting partners enable insurers to reduce the cost, effort and risk pertaining to the implementation of business strategies. Moreover, with the PartnerConnect program, the insurers can easily access Guidewire’s Marketplace that helps them to introduce innovative solutions and adapt to changing market demands.

Expanding Partner Base Holds Promise

Guidewire’s PartnerConnect alliance program is an innovative partnership program, which enables the company to expand its business. In fiscal 2018, the company validated approximately 85 partner-developed integrations that are also branded as “Ready for Guidewire.”

An expanding partner base of PartnerConnect program is expected to boost the adoption of Guidewire’s offerings, in turn favouring top-line growth in the foreseeable future.


 

These growth initiatives are instilling confidence in the stock. As a result, shares of Guidewire have gained 26.3% year to date, substantially outperforming the industry’s 17.4% rally.

Wrapping Up

Guidewire is benefiting from the strong adoption of several cloud-based products as insurers are increasingly looking to digitally transform their business processes. Per Gartner, the global Software-as-a-Service (SaaS) market is expected to hit $143.7 billion by 2022 compared with $80 billion valuation in 2018.

Moreover, the PartnerConnect program has been implemented worldwide, and is benefiting its customers in the property and casualty insurance industry.

However, increasing expenditure on product enhancements and marketing initiatives is likely to weigh on margins at least in the near term.

Zacks Rank & Key Picks

Currently, Guidewire carries a Zacks Rank #3 (Hold). Some better-ranked stocks worth considering in the broader sector are HubSpot, Inc. HUBS, Rosetta Stone Inc. RST and j2 Global, Inc. JCOM, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term earnings growth rate for HubSpot, Rosetta Stone and j2 Global is pegged at 47.8%, 12.5% and 8%, respectively.

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