Guidewire Gears up for Q2 Earnings: Here's What Investors Should Know

Guidewire Software, Inc GWRE is slated to report second-quarter fiscal 2025 results on Thursday.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Management expects revenues to be in the range of $282-$288 million. The Zacks Consensus Estimate is pegged at $285.7 million, indicating an 18.6% increase from the prior-year quarter's level.The consensus estimate for the bottom line is pegged at 52 cents, which remained unchanged in the past 60 days. GWRE reported earnings of 46 cents per share in the year-ago period.Image Source: Zacks Investment ResearchIt delivered a trailing four-quarter earnings surprise of 70.4%, on average. Shares of GWRE have gained 69.5% in the past year compared with the Internet-Software industry’s growth of 19.4%.Factors to Note Ahead of GWRE’s Q2 ReleaseGuidewire’s performance is likely to have benefited from continued momentum in its cloud-based solutions. Solid deal volume across all tiers (especially Tier 1 insurers) and increasing international momentum, especially in Asia Pacific and Europe, are other tailwinds. The company has been expanding its network of partners (which includes SIs like PwC, Deloitte, Capgemini, Accenture, EY, Sollers, and Cognizant and solution providers) to drive sustained activity and greater value from the platform.Guidewire Cloud is likely to have continued to gain momentum in the reported quarter with nine deal wins. Out of these deals, seven are for InsuranceSuite Cloud and five are with Tier 1 insurers.The company’s focus on enhancing the Guidewire Cloud platform with new capabilities is expected to have boosted sales of subscription-based solutions. Management expects subscription and support revenues of $175 million with services revenues of $48 million.For the second quarter of fiscal 2025, ARR is anticipated to be between $909 million and $914 million. We expect ARR to be $912 million. Guidewire Software, Inc. Stock Price and EPS Surprise Guidewire Software, Inc. price-eps-surprise | Guidewire Software, Inc. QuoteGWRE’s efforts to drive cloud operations efficiency to boost cloud margins remain an additional tailwind. The company’s expectation for non-GAAP operating income is pinned in the range of $39-$45 million. Our estimate for non-GAAP operating income is pegged at $42.2 million, up 64.1% year over year.  However, as the company invests more in its ecosystem of implementation partners, service revenues are likely to have been affected. License revenues are likely to have been affected owing to the migration of on-premise customers to the cloud. Increasing investments in product enhancements along with weakness in global macroeconomic conditions and inflation remain concerning.What Our Model Says About GWRE SharesOur proven model does not predict an earnings beat for GWRE this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here.GWRE has an Earnings ESP of 0.00% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Other Stocks to ConsiderHere are some better-ranked stocks that you may consider, as our model shows that these have the right combination of elements to beat on earnings this season.DICK'S Sporting GoodsDICK'S Sporting Goods, Inc. DKS is set to release quarterly numbers on March 11. It currently has an Earnings ESP of +0.11% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for DKS’ to-be-reported quarter’s EPS and revenues is pegged at $3.47 and $3.75 billion, respectively. Shares of DKS have gained 25.2% in the past year.American Eagle OutfittersAmerican Eagle Outfitters, Inc. AEO presently has an Earnings ESP of +2.29% and a Zacks Rank #3. AEO is scheduled to report quarterly numbers on March 12. The Zacks Consensus Estimate for AEO’s to-be-reported quarter’s bottom line is pegged at 50 cents. The same for revenues is pegged at $1.61 billion. Shares of AEO have lost 45.7% in the past year.The GapThe Gap, Inc. GAP has an Earnings ESP of +11.55% and a Zacks Rank #3 at present. GAP is scheduled to report quarterly figures on March 6. The Zacks Consensus Estimate for GAP’s to-be-reported quarter’s earnings and revenues is pegged at 36 cents per share and $4.07 billion, respectively. Shares of GAP have increased 17.7% in the past year.Just Released: Zacks Top 10 Stocks for 2025Hurry – you can still get in early on our 10 top tickers for 2025. Handpicked by Zacks Director of Research Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2025. You can still be among the first to see these just-released stocks with enormous potential. See New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report American Eagle Outfitters, Inc. (AEO): Free Stock Analysis Report DICK'S Sporting Goods, Inc. (DKS): Free Stock Analysis Report The Gap, Inc. (GAP): Free Stock Analysis Report Guidewire Software, Inc. (GWRE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks