Guidewire Software (GWRE) Surges 11.5%: Is This an Indication of Further Gains?

Guidewire Software GWRE shares ended the last trading session 11.5% higher at $204.60. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 5.1% gain over the past four weeks.The stock price appreciation can be attributed to Guidewire’s strong financial performance.  Moreover, the company is set to join S&P MidCap 400 by replacing Arrowhead Pharmaceuticals Inc on Jan. 27.Guidewire is gaining strength from higher deal volume, especially in Tier 1, and healthy momentum in the international domain (Asia Pacific and Europe). Steady growth in the Guidewire Cloud with nine deal wins in the last reported quarter bodes well.Management’s efforts to drive cloud operations efficiency to boost cloud margins remain an additional tailwind. In the last reported quarter, the subscription and support segment’s gross margin increased to 70.3% from 65.4% on a year-over-year basis, attributed to higher-than-expected revenues and increases in cloud infrastructure platform efficiency.Driven by strong revenue performance in the fiscal first quarter, Guidewire expects total revenues for fiscal 2025 to be between $1.155 billion and $1.167 billion compared with earlier guidance of $1.135-$1.149 billion. Subscription revenues are forecasted to be $648 million, while subscription and support revenues are expected to be $713 million. Services revenues are expected to be approximately $205 million. It continues to expect ARR for fiscal 2025 to be in the range of $995-$1,005 million.This provider of software to the insurance industry is expected to post quarterly earnings of $0.52 per share in its upcoming report, which represents a year-over-year change of +13%. Revenues are expected to be $285.69 million, up 18.6% from the year-ago quarter.While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.For Guidewire Software, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on GWRE going forward to see if this recent jump can turn into more strength down the road.The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>Guidewire Software is a member of the Zacks Business - Software Services industry. One other stock in the same industry, ePlus PLUS, finished the last trading session 0.2% higher at $80.68. PLUS has returned 9% over the past month.For ePlus, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $1.28. This represents a change of +8.5% from what the company reported a year ago. ePlus currently has a Zacks Rank of #3 (Hold).Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>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 Guidewire Software, Inc. (GWRE): Free Stock Analysis Report ePlus inc. (PLUS): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks