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Guidewire Software Inc GWRE

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Guidewire Provides a Solid Quarter with ARR Underscoring Cloud Progress; FVE $126

Dan Romanoff, CPA Senior Equity Analyst

Analyst Note

| Dan Romanoff, CPA |

Wide-moat Guidewire kicked off fiscal 2022 with a somewhat mixed but solid start overall. We are more sanguine about the ARR upside, modest revenue upside, and solid revenue outlook. With that said, we can also accept lower profitability this quarter and within the outlook as mostly a function of the cloud transition and lower than expected employee attrition—even if lower expected profitability is a bit of a departure from the last couple years. Still, our model adjustments were modest and justify holding our fair value estimate steady at $126 per share. We see results as being consistent with Guidewire advancing out of the pain zone for model transition stories, solidifying our belief that the company has turned the corner in terms of product development and customer references, and is now building momentum for new deal activity. We continue to see Guidewire as the primary winner as the P&C insurance industry continues to modernize.

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Company Profile

Business Description

Guidewire Software provides software solutions for property and casualty insurers. Flagship product InsuranceSuite is an on-premises system of record and comprises ClaimCenter, a claims management system; PolicyCenter, a policy management system including policy definitions, quotas, issuance, maintenance, and renewal; and BillingCenter, for billing management, payment plans, and agent commissions. The company also offers InsuranceNow, a cloud-based offering, as well as a variety of other add-on applications.

2850 S. Delaware Street, Suite 400
San Mateo, CA, 94403
T +1 650 357-9100
Sector Technology
Industry Software - Application
Most Recent Earnings Oct 31, 2021
Fiscal Year End Jul 30, 2022
Stock Type Distressed
Employees 2,942