Guidewire stock target raised to $250 by Citizens JMP

On Friday, Citizens JMP analyst Joe Goodwin increased the price target on Guidewire Software (NYSE:GWRE) shares to $250 from the previous target of $231, while maintaining a Market Outperform rating. The adjustment follows Guidewire’s report of strong financial results for the second quarter of fiscal year 2025. According to InvestingPro data, the stock has delivered an impressive 59.91% return over the past year, with analysts’ targets now ranging from $135 to $240.

Guidewire Software announced its F2Q25 earnings, showcasing a year-over-year (y/y) growth in Annual Recurring Revenue (ARR) of 15%, reaching $918.1 million, which surpassed the consensus estimate of $911.8 million. This growth marked an increase from the 14% y/y growth reported in the previous quarter. The company’s revenue also exceeded expectations, coming in at $289.5 million against the anticipated $285.5 million, representing a 20% y/y increase, albeit slightly lower than the 27% y/y increase seen last quarter. InvestingPro analysis shows the company maintains a healthy financial position with a current ratio of 2.66, indicating strong liquidity.

The firm’s subscription and support revenue was another highlight, amounting to $177.8 million, which was higher than the consensus estimate of $173.8 million and indicated a significant 35% y/y growth compared to 33% y/y in the last quarter. Guidewire also reported robust profit margins, with a non-GAAP gross margin of 65.2%, beating the consensus of 64.0%, and a non-GAAP operating margin of 18.6%, considerably higher than the expected 15.0%. With a market capitalization of $15.62 billion, Guidewire trades at a premium valuation, reflected in its high P/E ratio. Get access to 12 more key insights about Guidewire with an InvestingPro subscription.

Citizens JMP’s positive outlook on Guidewire Software is further supported by the belief that the company is well-positioned to capture a larger share of the growing property and casualty (P&C) Direct Written Premium (DWP) market. Currently, Guidewire’s platform handles approximately 23% of the total P&C DWP, and analysts at Citizens JMP anticipate that the company’s market share will expand over time. This potential for growth is cited as a key reason for the company’s premium valuation in the market.

In other recent news, Guidewire Software Inc . reported a 20% increase in total revenue for the second quarter of fiscal year 2025, reaching $289 million. This growth was driven by a 35% rise in subscription and support revenue, amounting to $178 million. Guidewire also closed 12 new cloud deals, marking significant progress in expanding its customer base. Despite slightly missing earnings per share (EPS) forecasts with an EPS of $0.51 against a projected $0.52, the company’s revenue exceeded expectations, coming in at $289.5 million compared to the anticipated $285.54 million. Analyst firms have noted the company’s raised annual recurring revenue (ARR) outlook, now projected between $1,000 million and $1,010 million, indicating a 16-17% year-over-year growth. Guidewire’s strategic focus on cloud solutions and its competitive positioning in the insurance technology sector have been highlighted as key factors in its financial performance. The company is also exploring generative AI applications to enhance its offerings. These developments underscore Guidewire’s ongoing momentum and strategic initiatives in the market.

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