DA Davidson upgrades Guidewire to Buy, sees pullback as opportunity

As previously reported, DA Davidson upgraded Guidewire (GWRE) to Buy from Neutral with an unchanged $246 price target The stock has pulled back about 20% after the company’s Q1 results in early December, but Guidewire should be considered as a core holding for investors looking for high-quality, vertical-market leaders in application software, and the pullback represents an opportunity, the analyst tells investors in a research note. Guidewire has made real progress on their transition to the cloud / subscription model, further cementing their leadership position in InsureTech, and over the next three years, the firm is forecasting 15%-17% compound annual growth in total revenue, with much more rapid growth in recurring Subscription revenue, DA Davidson added.