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Investing.com - Guidewire (NYSE:GWRE) stock climbed after Goldman Sachs maintained its Buy rating and $305.00 price target following the company’s quarterly results. The stock is currently trading at $215.76, with a year-to-date return of nearly 28%.
The software provider reported stronger-than-expected first-quarter performance across key metrics, with annual recurring revenue (ARR) reaching $1,063 million, exceeding guidance by $11 million. This represented sequential net new ARR of $22 million, marking the largest first-quarter net new ARR since at least fiscal 2019. InvestingPro data shows Guidewire achieved impressive 22.6% revenue growth over the last twelve months, with analysts expecting continued profitability this year.
Goldman Sachs noted that Guidewire’s performance likely surpassed investor expectations during what is typically a seasonally weaker quarter for new business. The firm highlighted record first-quarter sales activity amid strong continued cloud migration momentum.
Despite acknowledging Guidewire’s premium valuation, Goldman Sachs expressed confidence in the company’s long-term sustainability of market share gains and potential near-term upside from accelerating cloud migrations. This premium valuation is reflected in InvestingPro metrics, with the company trading at a P/E ratio of 267.5 and an EV/EBITDA of 338.2, significantly above current Fair Value estimates.
The investment bank also cited additional growth opportunities from new products like PricingCenter, UnderwritingCenter, and Data & Analytics offerings, along with a "realistic near-term path to $6+ in FCF/share" that could support premium growth-relative multiples.
In other recent news, Guidewire Software Inc. reported its first-quarter earnings for fiscal year 2026, surpassing Wall Street expectations. The company achieved earnings per share of $0.66, exceeding the forecasted $0.61. Revenue also surpassed projections, reaching $333 million compared to the anticipated $316.62 million. These results marked an 8.2% positive surprise in earnings. Such performance highlights the company’s strong financial health in the recent quarter. The earnings call did not mention any mergers or acquisitions. Analyst upgrades or downgrades were not reported in the recent news. Guidewire’s financial results are a key development for investors to consider. These are recent developments for Guidewire Software Inc .
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