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 (NYSE:GWRE) initially jumped nearly 11% early Tuesday following the company's better-than-expected quarterly results. However, the stock quickly gave up nearly all of its gains to close up around 0.4% following an analyst price target reduction.

So what: Quarterly revenue rose 20% year over year to $82 million, which translated to adjusted net income of $7.6 million, or $0.11 per diluted share. Analysts, on average, were looking for adjusted earnings of just $0.03 per share on sales of $78.7 million.

In addition, Guidewire now expects full-year 2014 revenue to be in the range of $341.5 million to $345.5 million, or an increase of $5 million at the midpoint from its previous expected range. This should result in adjusted net income per share of $0.51 to $0.55. Both ranges are well above expectations for 2014 earnings of just $0.38 per share on revenue of $342.2 million.

Despite its strong performance, analysts at UBS reduced their price target on Guidewire shares to $46 from $60, citing valuation concerns amid broader industry pressures. Still, with Guidewire currently trading around $37 per share, UBS maintained its buy rating on the stock.

Now what: To be sure, Guidewire doesn't exactly look like a bargain trading around 8 times trailing 12-month sales and 73 times next year's expected earnings. Even if those estimates rise as a result of today's numbers, I'm still not particularly eager to open a position. For now, I'm perfectly happy just keeping Guidewire on my watch list.

Steve Symington owns shares of Apple. The Motley Fool recommends and owns shares of Amazon.com and Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.