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On Wednesday, Raymond (NSE:RYMD) James analysts raised the price target for Guidewire stock (NYSE: GWRE) to $255 from $225, while maintaining their Outperform rating. Currently trading at $218.18, the stock has delivered an impressive 102% return over the past year. The decision follows Guidewire’s record fiscal third-quarter bookings, marking the third-largest quarter in its history, which drove a 50% year-over-year increase in net new annual recurring revenue (ARR). According to InvestingPro, 10 analysts have recently revised their earnings estimates upward for the upcoming period.
The analysts noted that Guidewire is showing strong performance, with increasing adoption in the cloud market and significant growth in its legacy-vended market. The company reported 17 cloud wins and nine cloud migration deals in the fiscal third quarter, contributing to higher ARR uplifts. This momentum is reflected in the company’s robust 17.2% revenue growth over the last twelve months, with total revenue reaching $1.08 billion.
Guidewire’s cloud maturity is cited as a key factor in its high win rates and consistent expansion activities, including full suite adoption. The company is also experiencing elevated premium growth and a healthier property and casualty (P&C) end-market, which supports its growth outlook.
Raymond James analysts expressed confidence in Guidewire’s long-term growth prospects, highlighting the company’s high visibility from fully ramped ARR growth, which is outpacing ARR growth. They believe this trend is likely to continue into fiscal years 2025 and 2026.
Despite potential challenges in multiple expansion without continued momentum, the analysts remain positive on Guidewire’s risk and reward profile, citing increasing long-term visibility and favorable fundamentals.
In other recent news, Guidewire Software Inc (NYSE:GWRE). reported impressive financial results for its fiscal third quarter, surpassing Wall Street expectations. The company achieved an earnings per share (EPS) of $0.88, significantly higher than the forecasted $0.41, and revenue reached $294 million, exceeding the anticipated $286.33 million. Guidewire’s annual recurring revenue (ARR) also outperformed, reaching $960 million against the consensus estimate of $945.1 million. Following these strong results, several analyst firms adjusted their price targets for Guidewire. Goldman Sachs and Stifel both raised their price targets to $270, maintaining a Buy rating, while Citizens JMP increased its target to $281 with a Market Outperform rating. Analysts highlighted Guidewire’s successful cloud migration efforts and its overall robust performance as key factors driving these upgrades. Additionally, the company announced plans for a significant $60 million investment in the Japanese market over the next five years, reflecting its strategic focus on global expansion. These developments underscore Guidewire’s strong market momentum and its ability to exceed financial expectations.
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