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Guidewire Software's (GWRE) Cyence Solution Used by At-Bay

Guidewire Software GWRE has announced that its cyber risk modeling and analytics product, Cyence, is being leveraged by a San Francisco-based insurance company At-Bay.

Guidewire completed the acquisition of Cyence for approximately $275 million or $265 million net of $10 million cash in hand in 2017. Cyence helps to evaluate the economic impact of cybercrime through a software platform that is built on cybersecurity-related data science.

At-Bay plans to leverage Guidewire’s products to tap the growing demand for cyber and digital risk management due to the ongoing digitalization. It will expand its data capabilities and tools for proactive risk management and minimizing aggregation risk exposure.

This will in turn help At-Bay to further develop its underwriting and portfolio risk management decisions.

Per a report from Markets and Markets, the global cybersecurity insurance market size is projected to grow from $11.9 billion in 2022 to $29.2 billion by 2027, witnessing a CAGR of 19.6%. The industry is expected to benefit from increasing cyber-attack and increased spending on cyber insurance, added the report. This bodes well for Guidewire.

Guidewire is also working on the continuous development of its Cloud platform with new features such as digital frameworks, automation, tooling and other cloud services. Guidewire Cloud continued to gain momentum with 16 cloud deals in the fiscal fourth quarter among new and existing clients.

Recently, Guidewire announced that a Canadian property and casualty insurer - Definity Financial Corporation - has moved its core insurance platform to Guidewire Cloud. Definity will leverage Guidewire Cloud, which runs on Amazon Web Services cloud technology to improve security, mitigate planned and unplanned outages and manage rising cyber security risks.

Prior to that, it was chosen by Topdanmark, Golden Bear Insurance, Aioi Nissay Dowa Insurance, Franklin Mutual Insurance and Cornerstone National Insurance Company to automate and simplify business processes.

Guidewire reported non-GAAP earnings of 3 cents per share in fourth-quarter fiscal 2022 (ended Jul 31, 2022), surpassing the Zacks Consensus Estimate of a loss of 4 cents. However, this compares unfavorably with the year-ago quarter’s non-GAAP earnings of 37 cents per share.

The company reported revenues of $244.6 million, rising 7% year over year and beating the Zacks Consensus Estimate by 6.6%.

Subscription and support revenues (38.3% of total revenues) soared 34% from the year-ago quarter’s levels to $93.6 million, owing to higher subscription revenues.

However, the company’s performance is affected by increasing integration risks and single industry-centric offerings.

Presently, Guidewire carries a Zacks Rank #3 (Hold). Shares of the company have lost 44.1% compared with the industry’s decline of 30.1% in the past year.

Image Source: Zacks Investment Research

Stocks to Consider

Some better-ranked stocks from the broader technology space are Cadence Design Systems CDNS, Badger Meter BMI and Arista Networks ANET. Arista Networks, Badger Meter and Cadence Design Systems each currently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for CDNS 2022 earnings is pegged at $4.11 per share, rising 5.7% in the past 60 days. The long-term earnings growth rate is anticipated to be 17.7%.

Cadence’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 9.8%. Shares of CDNS have jumped 2.1% in the past year.

The Zacks Consensus Estimate for BMI’s 2022 earnings is pegged at $2.30 per share, up 6% in the past 60 days.

Badger Meter’s earnings beat the Zacks Consensus Estimate in three of the preceding four quarters, with the average being 12.6%. Shares of BMI have lost 7.4% of their value in the past year.

The Zacks Consensus Estimate for Arista Network’s 2022 earnings is pegged at $4.04 per share, increasing 10.1% in the past 60 days. The long-term earnings growth rate is anticipated to be 18.6%.

Arista Network’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 10.1%. Shares of ANET have increased 30.8% in the past year

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