Why Guidewire Software (GWRE) Is Popping on Tuesday

NEW YORK (TheStreet) -- Guidewire Software (GWRE) is popping on Tuesday after posting above-consensus earnings and sales over its second quarter.

By midafternoon, shares had added 6.3% to $56.52. Trading volume of 1.2 million was more than three times its three-month daily average.

The enterprise software developer reported net income of 16 cents a share and revenue of $83.5 million, a 15.7% year-over-year increase.

Analysts surveyed by Thomson Reuters forecast net income of 2 cents a share and revenue of $77.36 million.

Over its third quarter ending April, the Foster City, Calif.-based business expects net income of a penny a share and revenue between $77 million and 79 million.

Analysts expect earnings of 2 cents a share on total sales of $78.8 million.

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TheStreet Ratings team rates GUIDEWIRE SOFTWARE INC as a Hold with a ratings score of C-. The team has this to say about their recommendation:

"We rate GUIDEWIRE SOFTWARE INC (GWRE) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share."

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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