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Factors to Note Ahead of Guidewire (GWRE) Q1 Earnings Release

Guidewire Software, Inc GWRE is slated to report first-quarter fiscal 2024 results on Dec 7.

Management expects revenues in the range of $197-$202 million. The Zacks Consensus Estimate is pegged at $201 million, suggesting a 2.9% increase from the prior-year levels.

The consensus estimate is pegged at a loss of 17 cents per share, unchanged in the past 30 days. GWRE reported a loss of 12 cents a year ago.

Guidewire Software, Inc. Price and EPS Surprise

Guidewire Software, Inc. Price and EPS Surprise
Guidewire Software, Inc. Price and EPS Surprise

Guidewire Software, Inc. price-eps-surprise | Guidewire Software, Inc. Quote

Factors at Play

Guidewire’s performance is likely to have gained from higher demand for cloud-based insurance software solutions. Guidewire Cloud continues to gain momentum with 17 cloud deals in the last reported quarter.

Momentum in data and analytics offerings is likely to have acted as a key growth factor. Strong uptake of multiple components of its InsurancePlatform, including InsuranceSuite, digital, data and analytics, is anticipated to have acted as an additional tailwind.

Healthy adoption witnessed in subscription-based InsuranceSuite Cloud offerings is expected to have contributed to the Subscription and support segment’s revenues in the to-be-reported quarter. Also, migration activity for InsuranceSuite Cloud is likely to have favored the company’s top-line performance. We expect the Subscription and support segment’s revenues to be $123 million, up 24.2% year over year in the fiscal first quarter.  

Driven by new sales and deal ramps, annual recurring revenues (ARR) were $763 million as of Jul 31, up 15% (rose 15% on a constant-currency basis) year over year. Management expects ARR to be between $766 million and $769 million for the quarter to be reported.

Improvement in Subscription and support segments’ gross margins is likely to have favored overall margin performance.

Weakness in global macroeconomic conditions and inflation are compelling to reduce expenses, especially for mid and small-scale businesses, and are likely to have acted as headwinds. Increasing investments in product enhancements are expected to have put pressure on margin expansion in the fiscal fourth quarter.

What Our Model Says

According to the Zacks model, 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. But that’s not the case here.

Guidewire has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some stocks that you may consider, as our model shows that these have the right combination of elements to beat on earnings this season.

Casey's General Stores CASY has an Earnings ESP of +13.86% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Casey’s is set to release second-quarter fiscal 2024 results on Dec 11. The Zacks Consensus Estimate for earnings is pegged at $3.65 per share. Shares of CASY have gained 19.8% in the past year.

Genasys GNSS has an Earnings ESP of +21.74% and a Zacks Rank #2. GNSS is scheduled to release fourth-quarter fiscal 2023 numbers on Dec 7.

The Zacks Consensus Estimate is pegged at a loss of 8 cents per share. The consensus estimate for revenues is pegged at $10.14 million. The stock has lost 41.1% of its value in the past year.

Lululemon Athletica Inc LULU has an Earnings ESP of +0.19% and a Zacks Rank of 3.

Lululemon Athletica is scheduled to post third-quarter fiscal 2023 figures on Dec 7. The Zacks Consensus Estimate for earnings is pegged at $2.27 per share, implying a 13.5% rise from a year ago. Shares of LULU have increased 22.4% in the past year.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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lululemon athletica inc. (LULU) : Free Stock Analysis Report

Guidewire Software, Inc. (GWRE) : Free Stock Analysis Report

Casey's General Stores, Inc. (CASY) : Free Stock Analysis Report

Genasys Inc. (GNSS) : Free Stock Analysis Report

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