Wells Fargo Upgrades Guidewire (GWRE) to Equal Weight, 'Cloud Transition (Finally) Turning a Corner'

Wells Fargo analyst Michael Turrin upgraded Guidewire (NYSE: GWRE) from Underweight to Equal Weight with a price target of $85.00 (from $65.00).

The analyst comments "Guidewire began transitioning its business model to the cloud in FY18—a more complex business model transformation than others in software given the heterogeneity and risk averse nature of insurers. Our industry conversations suggest GWRE has improved on its cloud product set, esp. over the past year, driving an improvement in win rates & cloud adoption rates vs the competition. Cloud sales momentum and cost controls are also driving gross margin improvements, suggesting potential for an improving economic profile over the next several years. Our Equal Weight rating balances these inputs with the inconsistent track record of the company over the past couple of years, suggesting the path to 20+% FCF margin will still take considerable time to play through."

For an analyst ratings summary and ratings history on Guidewire click here. For more ratings news on Guidewire click here.

Shares of Guidewire closed at $83.80 yesterday.

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