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Software provider to the P&C insurance industry company Guidewire Software Inc (NYSE:GWRE) reported Thursday fiscal fourth-quarter results which were better than expected but management's guidance disappointed, according to JMP.
The Analyst
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JMP analyst Patrick Walravens maintains a Market Perform rating on Guidewire's stock.
The Thesis
Guidewire reported a six cent EPS beat in the fiscal fourth quarter and a $3 million revenue beat at $208 million, Walravens wrote in a note. However, revenue was down 13% from last year and annual recurring revenue rose 13% but short of management's initial guidance of 15% to 18%.
Management's guidance for the fiscal first quarter was disappointing as EPS was guided at one cent to five cents versus the consensus estimate of 27 cents. Revenue of $149 million to $153 million was also short of expectations at $187 million.
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The company's leadership position within the $2 trillion global P&C insurance industry remains unchanged but management needs to address multiple near-term changes, the analyst wrote. These include: evolving the business to better service Guidewire cloud demand, transforming to a subscription revenue company, transitioning the new CEO Mike Rosenbaum, implementing a greater usage of ramped deals and deal with the competitive landscape as rivals Duck Creek and Majesco continue maturing and strengthening.
Finally, Guidewire's stock is fairly valued at 7.6 times 2021 estimated EV/revenue and 33.7 times 2021 estimated EV/free cash flow versus the vertical software peer group median at 6.3 times and 24.0 times, respectively.
Price Action
Shares of Guidewire Software hit a new 52-week high of $110.67 Friday morning and were trading higher by more than 18% at $113.05.
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Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.