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Investing.com - Oppenheimer raised its price target on Guidewire (NYSE:GWRE) to $300 from $275 while maintaining an Outperform rating on Friday. The stock, currently trading at $216.99 with a market capitalization of $18.32 billion, has delivered an impressive 50.76% return over the past year. According to InvestingPro analysis, the company appears to be trading above its Fair Value.
The insurance software provider reported Annual Recurring Revenue (ARR) of $1,032 million, exceeding consensus estimates of $1,018 million. The strong performance was driven by 19 cloud deals, including nine tier-one deals and eight migrations, with a notable 10-year agreement with Liberty Mutual. This momentum aligns with the company’s robust revenue growth of 18.61% over the last twelve months. For deeper insights into Guidewire’s growth metrics and 13 additional ProTips, consider accessing the comprehensive research available on InvestingPro.
Guidewire’s fiscal year 2026 ARR guidance projects 16-17% year-over-year growth excluding foreign exchange effects, surpassing both consensus expectations of approximately 15% and investor expectations of around 16%. The company’s fully-ramped ARR growth of 22% further demonstrates the durability of its revenue stream.
The subscription and support margin outlook of 71-72% indicates an expansion of 100-200 basis points, while overall gross margins are expected to remain flat year-over-year at approximately 66%, reflecting declines in license revenue. Operating income and operating cash flow outlooks exceeded consensus by $9 million and $43 million respectively.
Oppenheimer cited strong cloud execution, artificial intelligence benefits, and an optimal mix of offensive and defensive characteristics as reasons for maintaining Guidewire as its top small and mid-cap pick. InvestingPro data supports this positive outlook, highlighting the company’s strong financial health score of 2.78 (GOOD) and healthy liquidity with a current ratio of 3.23.
In other recent news, Guidewire Software reported impressive fourth-quarter 2025 earnings, with an earnings per share (EPS) of $0.84, surpassing the forecasted $0.63. The company’s revenue also exceeded expectations, reaching $356.57 million compared to the anticipated $337.85 million. This strong performance has been acknowledged by various analyst firms. Raymond James raised its price target for Guidewire to $275, citing the company’s exceptional fourth-quarter results and notable year-over-year growth in annual recurring revenue (ARR). Similarly, Stifel increased its price target to $300, attributing the rise to Guidewire’s successful cloud migration momentum. RBC Capital also adjusted its price target to $300, highlighting the company’s robust cloud execution and significant ARR growth. These developments underscore Guidewire’s strong market position and ongoing business expansion.
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