Guidewire’s Insurance Niche Ensures Success

The software company posted yet another blow-out quarter

   

Since going public at $13 in late January, Guidewire Software (NYSE:GWRE) has turned out to be one of the year’s best deals. The company posted yet another strong quarter and is up more than 9% in today’s trading alone, bringing total gains since its IPO to around 88%.

Not too shabby. For those who haven’t heard of the company, it develops software to help insurance companies manage their operations, including claims, underwriting and billing. Customers include Tokio Marine & Nichido Fire Insurance and Mercury & Zurich Financial Services Group.

mark zuckerberg caricature facebook fb 630 200x200 Guidewires Insurance Niche Ensures Success
Zuckerberg Gets Serious About FB Stock

And that business is indeed booming. In the fiscal fourth quarter, Guidewire’s revenue increased 33% to $67.6 million and net income was $3.5 million, up from a loss of $1.2 million in the same period a year ago. Operating cash flows came to $19.1 million. And in all, the company has $205.7 million in the bank.

Plus, Guidewire is still in the early stages of its market opportunity. It is the only software company of its scale that has a singular focus on the insurance industry, and the industry overall has countless technologies that are decades old and need to be upgraded. Thus, the company is a solid bet that it will likely keep up the momentum.

Tom Taulli runs the InvestorPlace blog IPOPlaybook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli. As of this writing, he did not own a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, http://investorplace.com/ipo-playbook/guidewires-insurance-niche-ensures-success/.

©2014 InvestorPlace Media, LLC

Comments are currently unavailable. Please check back soon.