Key facts
- Guidewire reported Q3 earnings of $0.82 per share, exceeding estimates.
- Q3 revenue was $372.5 million, surpassing forecasts.
- The company's Annual Recurring Revenue (ARR) missed both Wall Street and Stifel expectations.
- GWRE stock fell approximately 14% in after-hours trading.
- Stifel cut its price target to $200 from $225 but maintained a Buy rating.
- RBC trimmed its price target to $215 from $250, keeping an Outperform rating.
Guidewire Software (GWRE) reported its Q3 fiscal year 2026 results, which showed earnings per share of $0.82, beating the $0.74 estimate, and revenue of $372.5 million, exceeding the $355.99 million forecast. However, the company's Annual Recurring Revenue (ARR) fell short of both Wall Street and Stifel's expectations, causing the stock to drop approximately 14% in after-hours trading. Management attributed the ARR miss to deal timing rather than a demand issue, maintaining full-year ARR guidance. Stifel cut its price target on GWRE to $200 from $225 while reiterating a Buy rating, citing early traction in new products and improving gross margins as reasons to view the post-earnings weakness as a buying opportunity. RBC also reduced its target to $215 from $250, maintaining an Outperform rating, citing the mixed guidance. The stock has already declined 28% over the past six months and trades at a P/E ratio of 71.