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DA Davidson has shown confidence in Guidewire (NYSE:GWRE) Software Inc (NYSE: GWRE), raising the stock's price target from $142.00 to $168.00 while maintaining a Buy rating.
The firm anticipates that Guidewire will either meet or slightly surpass both its own and the consensus forecasts in the upcoming fiscal fourth-quarter results, which are scheduled to be announced after the market closes on September 5, 2024.
The company is also expected to hold a conference call at 5 pm ET on the same day to discuss the results. Analysts from DA Davidson believe that, alongside the reported results, Guidewire's management will likely provide initial financial guidance for fiscal 2025 that aligns with or exceeds current forecasts.
Guidewire's potential to fulfill or exceed expectations has contributed to DA Davidson's decision to maintain a positive outlook on the stock.
By shifting its valuation framework to the calendar year 2026 forecasts, the firm has justified the increase in the price target for Guidewire shares.
In other recent news, Oppenheimer maintained an Outperform rating on Guidewire and increased the price target to $170, citing a balanced risk/reward scenario and strong market dynamics. The firm anticipates Guidewire's annual recurring revenue (ARR) to beat estimates, projecting around $7-8 million excluding foreign exchange impacts.
The company's robust third-quarter sales activity was also highlighted by Baird, which increased its price target for Guidewire shares to $152. The firm cited a 15% year-over-year increase in ARR and robust third-quarter sales activity. DA Davidson also raised Guidewire's price target to $142, following total revenue surpassing forecasts by 5% and Non-GAAP operating income exceeding expectations by a significant 160%.
Wells Fargo maintained its Overweight rating on Guidewire and increased the price target to $140, following the company's strong fiscal third-quarter results. The firm cited deal momentum and the maturation of Guidewire's cloud infrastructure as key growth drivers. Similarly, RBC Capital maintained an Outperform rating and a $130 price target, attributing the company's success to momentum in cloud services and increased customer migration activities.
InvestingPro Insights
As Guidewire Software Inc (NYSE:GWRE) approaches its fiscal fourth-quarter results, key metrics and InvestingPro Tips provide a deeper insight into the company's financial health and market performance. With a market capitalization of $12.2 billion, Guidewire's revenue for the last twelve months as of Q3 2024 stood at $958.94 million, reflecting a growth of 8.97%. This growth is further emphasized by a quarterly revenue increase of 15.99% in Q3 2024.
InvestingPro Tips suggest that while Guidewire has been trading at a high Price / Book multiple of 9.47, indicating a premium valuation, the company is expected to become profitable this year. This is corroborated by a strong return over the last three months, with a 22.79% price total return, and an impressive one-year price total return of 79.59%. Additionally, Guidewire operates with a moderate level of debt, which could be a stabilizing factor for potential investors.
These insights, coupled with the fact that Guidewire is trading near its 52-week high, at 95.72% of this peak, underscore why DA Davidson might have a bullish stance on the company. For those interested in further analysis and tips, InvestingPro offers additional insights on Guidewire, which can be found at https://www.investing.com/pro/GWRE.
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