Why Guidewire Software Shares Skyrocketed

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Guidewire Software have skyrocketed today by as much as 21% after the company reported strong earnings.

So what: Revenue in the fiscal second quarter came in at $72.2 million, easily crushing the consensus estimate of just $64.3 million. The non-GAAP earnings per share of $0.21 similarly made short work of the mere $0.02 per share adjusted profit that the Street was modeling for. The results topped the high end of Guidewire's guidance range.

Now what: CEO Marcus Ryu said several customers made payments earlier than needed, which helped boost results, and the company has been able to up-sell many existing customers. At least two analysts are encouraged. Deutsche Bank boosted its price target from $38 to $41 while keeping a buy rating, seeing opportunity in geographic expansion. UBS followed suit and was encouraged by strong guidance that calls for 2013 sales to grow by 23% to 26%.

Interested in more info on Guidewire? Add it to your watchlist by clicking here.

2013 and beyond
The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock it is in the brand-new free report: "The Motley Fool's Top Stock for 2013." Just click here to access the repo,rt and find out the name of this under-the-radar company.

The article Why Guidewire Software Shares Skyrocketed originally appeared on Fool.com.

Fool contributor Evan Niu, CFA, has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.