After rising 300% in 18 months Router program New York Stock Exchange: JWRE It has finally produced the kind of correction that investors can sink their teeth into. The market is down more than 10% on a good report, as well as improvised guidance, a cautious stance, and other factors that suggest all-time highs will be set.
It may take the market some time to regain its footing and build momentum, but this is also good news, giving investors and traders time to set their entry prices and develop positions for what will likely be a strong uptrend in 2025.
What does Guidewire Software do? Guidewire Software is the leading cloud-based, AI-powered operating platform for property and casualty insurance companies. It offers services spanning the spectrum of the P&C industry and end-to-end services to some. New deals that provided evidence of the claim boosted first-quarter results and second-quarter guidance, which came in ahead of consensus estimates.
The company signed nine new deals, including five Tier 1 insurers, including property and casualty insurers with the largest market share, stable business, and good capital reserves. Although it is not alone in the industry, it has a moat in a growing industry and is well-suited to promoting artificial intelligence and automation.
Guidewire today
Router program
(As of 6/12/2024 ET)
- 52 week range
- $95.02
▼
$209.15
- P/E ratio
- 493.25
- Price target
- $193.00
Guidewire enters health correction: outlook positive
Guidewire Software had a strong quarter, with revenue, margin, earnings and guidance exceeding high expectations. Net revenue of $262.9 million increased 27% year over year and beat the reported MarketBeat consensus by 350 basis points on strength across all segments driven by new deals and large clients.
Subscriptions and support, the largest segment, saw growth of 33%, offset by slower growth of 22% in services and 10% growth in licenses.
Margin news includes improving gross and operating margins, with GAAP operating losses narrowing to nearly $0, adjusted profitability, and expectations for improvement as the year progresses. The net result is adjusted EPS of $0.43, $0.43 higher than last year and $0.13 ahead of expectations, prompting management to improve guidance for the second quarter and the year.
Guidewire’s guidance is good because Q2 targets are above consensus, and the full-year range, which is in parentheses, is likely cautious. The growth of process automation in the insurance industry is expected to at least double by the end of the decade.
Analysts raise Guidewire targets and point to all-time highs in 2025
Guidewire Software Stock Forecast Today
$193.00
8.69% upModerate purchase
Based on 14 analyst ratings
| High expectations | $231.00 |
|---|---|
| Average expectations | $193.00 |
| Low expectations | $95.00 |
Guidewire stock forecast details
Analyst sentiment trends for Guidewire’s quality and price targets are strong in 2024. Coverage is on the rise, with the number of analysts up 75% this year over last. The 14 stocks tracked by MarketBeat peg the stock at a Moderate Buy, but 78% rate it a Buy or better; Only two rated it as a Hold and one as a Sell.
The consensus target price does not offer much upside from crucial support, but the trend is more important. The $190 consensus suggests a 3% to 5% upside for the market from critical support, but revision trends, including a few released after the Q1 report, put this stock in the high-end range near $220 to $230. This is enough to reach a new all-time high and a gain of nearly 30% in the stock price.
The technical action was ugly in early December, but a bottom should form quickly. The market fell more than 10% and tested support at a level that could be very strong. The critical level is close to $170/$175, which could be reached before the end of the year. One of the obstacles facing this market is its valuation.
Trading at $170, it still represents 30 times its 2030 EPS estimates and perhaps fully values its growth potential. However, the company’s continued outperformance, insurance industry growth, and future expectations for insurance industry automation growth suggest that estimates are low, and that there is deeper value than current estimates indicate.
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