Guidewire Software (GWRE) posted quarterly earnings of $0.46 per share, beating the Zacks’ consensus estimate of $0.21 per share. That compares with a loss of $0.21 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report presents a surprise gain of 119.05%. A quarter ago, the insurance industry software provider was expected to post a loss of $0.17 per share when it actually broke even, delivering a 100% surprise.
Over the past four quarters, the company has topped consensus earnings per share estimates four times.
Guidewire Software, which belongs to the Zacks Business – Software Services industry, reported revenue of $240.9 million for the quarter ending January 2024, missing the Zacks’ consensus estimate by 0.01%. That compares to last year’s revenue of $232.61 million. The company has beaten consensus revenue estimates twice in the last four quarters.
The sustainability of the current stock price movement based on recently released numbers and future earnings expectations will depend mostly on management’s commentary on the earnings call.
Shares of Guidewire Software have added about 5.7% year-to-date versus the S&P 500’s 7% gain.
What’s next for Guidewire software?
While Guidewire Software has underperformed the market so far this year, the question on investors’ minds is: What’s next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this question is a company’s earnings outlook. Not only does this include current consensus earnings expectations for the coming quarters, but also how those expectations have changed recently.
Empirical research shows a strong correlation between short-term stock movements and trends in earnings estimate revisions. Investors can track such revisions themselves or rely on a proven rating tool like Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revision trend for Guidewire Software: mixed. While the size and direction of the estimate revisions could change following the company’s just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the stock is expected to be in line with the market in the near future. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how the estimates for the upcoming quarters and the current fiscal year change in the coming days. The current EPS consensus estimate is $0.10 on $234.35 million in revenue for the upcoming quarter and $0.92 on $982.11 million in revenue for the current fiscal year.
Investors should keep in mind the fact that the outlook for the industry can also have a significant impact on a stock’s performance. In terms of Zacks Industry Rank, Business – Software Services is currently in the top 22% of the 250 plus Zacks industries. Our research shows that the top 50% of Zacks-Rank industries outperform the bottom 50% by a factor of more than 2-to-1.
StoneCo Ltd. ( STNE ), another stock in the broader Zacks Computer and Technology sector, has not yet reported results for the quarter ending in December 2023. The results are expected to be released on March 18th.
This company is expected to post quarterly earnings of $0.29 per share in its upcoming report, representing a year-over-year change of +107.1%. The consensus EPS estimate for the quarter was unchanged over the past 30 days.
It is expected that the revenues of StoneCo Ltd. to be 468.47 million dollars, which is a decrease of 8.9% compared to the same quarter last year.
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