Guidewire Software gains as analyst target hike and upbeat growth expectations lift sentiment

BBH Select Mid Cap ETF's Q2 2026 letter notes Guidewire Software (GWRE) as a top holding. GWRE, a P&C insurer platform provider, saw a 17.7% decline despite strong Q3 results and raised guidance. The company's ARR growth met mid-range expectations, and AI integration is reducing migration costs, potentially driving future growth. GWRE closed at $181.18 with a 37.91% one-month return and a 14.98% 52-week loss.

Analysts upgraded Micron (MU) and Guidewire (GWRE) citing improved inventory and AI growth, respectively. Goldman Sachs (GS) and Datadog (DDOG) were downgraded due to valuation concerns and growth expectations.

Guidewire Software (GWRE) shares rose 6.8% as investors focused on fiscal Q3 2026 results and a raised full-year outlook, according to the company and related sources. Q3 revenue was $372.5 million (+27% YoY) with subscription and support revenue up 35%. Annual recurring revenue was $1.147 billion as of April 30, 2026, and non-GAAP EPS was $0.82.

Guidewire Software reported Q3 non-GAAP gross profit of $247M (+29% YoY) and 66% gross margin. Non-GAAP operating profit was $78M. The company ended with $1.15B cash/investments and $61M operating cash flow, repurchasing 1.7M shares at $147.07. It raised FY2026 revenue to $1.46B–$1.47B and operating income and expects OCF $365M–$380M, citing cloud wins and ProNavigator adoption by five insurers.

U.S. stocks fell after a stronger-than-expected May jobs report, which showed 172,000 nonfarm payroll jobs added versus about 85,000 expected and an unchanged 4.3% unemployment rate, according to the report. The data reduced expectations for near-term Fed rate cuts and pressured growth stocks. Upland Software shares fell 12.7% and Guidewire Software fell 11.1%.

Guidewire Software shares fell about 14% after the company reported Q3 net income of $16.47M, down from $46M a year earlier, citing a $20.1M foreign-currency loss. Revenue rose to $372.54M from $293.51M, and adjusted net income increased to $69.65M. Guidewire raised FY26 outlook, including revenue to $1.460B–$1.470B and adjusted operating income to $314M–$324M.