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On Wednesday, JMP Securities analyst Joe Goodwin reiterated a Market Outperform rating and a $250.00 price target for Guidewire Software (NYSE:GWRE). The reaffirmation follows Guidewire’s announcement on Monday that it has entered into a definitive agreement to acquire Quantee, a Polish InsurTech startup. This acquisition comes as Guidewire’s shares have delivered impressive returns, with a 71% gain over the past year and a year-to-date increase of 18%, contrasting with a 2% decline in the Russell 3000 index. According to InvestingPro data, analysts maintain a consensus buy recommendation, with 10 analysts recently revising their earnings estimates upward for the upcoming period.
Guidewire Software’s recent move to acquire Quantee is seen as a strategic effort to enhance its insurance pricing capabilities. Quantee offers a Software as a Service (SaaS) platform designed to help insurers and Managing General Agents (MGAs) in the property and casualty (P&C) as well as healthcare insurance sectors. The platform aims to refine pricing model granularity and accuracy, yield more precise results, and support instant deployment and monitoring in real-time.
The deal with Quantee, which was described as a relatively small all-cash acquisition, is expected to bring both product innovation and talent to Guidewire. Quantee, with a workforce of 25 employees, was founded in 2018. Its key investors include Polish venture capital firms Nunatak Capital and FundingBox, which participated in the company’s Seed funding round in May 2022.
Furthermore, the analysis of the Guidewire App Marketplace indicated that Quantee had not been a partner of Guidewire. However, Quantee did announce a partnership with Sapiens (NASDAQ:SPNS) in March 2024. The acquisition of Quantee by Guidewire is not considered a pure acquihire, suggesting that the move was motivated by the potential product synergies as well as the talent that Quantee’s team brings to the table.
Guidewire’s decision to integrate Quantee’s innovative technology is part of its broader strategy to remain competitive in the evolving InsurTech landscape. With the acquisition, Guidewire aims to bolster its product offerings and further solidify its position in the market.
In other recent news, Guidewire Software Inc . reported strong financial performance for its second fiscal quarter, exceeding expectations in annual recurring revenue (ARR), total revenue, and operating income. The company secured 12 cloud deals during the quarter, an increase from the previous year, with five of these involving new customers. Guidewire’s management has revised its fiscal 2025 forecasts, raising the midpoints for total revenue, ARR, and operating income. Analysts from DA Davidson, Stifel, Raymond (NSE:RYMD) James, and Goldman Sachs have maintained their positive ratings on Guidewire, citing strong cloud momentum and strategic direction, although Goldman Sachs slightly reduced its price target to $235. Meanwhile, Citi raised its price target to $199 but maintained a neutral rating, pointing to valuation concerns and profitability metrics compared to industry peers. Analysts noted that while the third-quarter ARR outlook was slightly below expectations, the timing of deal ramp-ups is expected to bolster fourth-quarter results. Guidewire’s continued success in the cloud sector and its comprehensive suite offerings underscore its potential for long-term growth, according to the analysts.
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