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Guidewire Software, Inc. (GWRE) Stock Guide

September 17, 2020
25
Bull Case
  • Revenue growth higher than the industry and sector averages
  • Cash/Debt ratio is higher than the industry and sector averages
Bear Case
  • Company’s profitability is declining
  • Forward P/E ratio high relative to industry peers
  • Forward P/S ratio high relative to industry peers
  • Forward PEG ratio high relative to industry peers
  • High short share of float
  • High short interest

Before we start: if you're looking for GWRE stock price, you can quickly find it out by visiting Finny and typing "GWRE quote". If you're looking for a quick scoop on GWRE stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "GWRE". You'll get all this info in one place. Or you can just type "GWRE news" to get the latest stock news.

Looking to buy or sell Guidewire Software, Inc. (GWRE)? Interested in getting the full scoop on GWRE, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this GWRE stock guide, we'll address key questions about GWRE, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are GWRE earnings?
2. GWRE buy or sell? What is GWRE Finny Score?
3. What are the reasons to buy GWRE? Why should I buy GWRE stock?
4. What are the reasons to sell GWRE? Why should I sell GWRE stock?
5. What are GWRE key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are GWRE earnings?

GWRE trailing 12-month earnings per share (EPS) is -$0.52.

Analysis

2. GWRE buy or sell? What is GWRE Finny Score?

Our quantitative analysis shows 2 reasons to buy and 6 reasons to sell GWRE, resulting in Finny Score of 25.

3. What are the reasons to buy GWRE? Why should I buy GWRE stock?

Here are the reasons to buy GWRE stock:

  • Guidewire has multiple avenues for growth through new customer wins and upselling current customers to new products and penetrating additional business lines.
  • Software spending is among the fastest-growing segments of IT budgets for property and casualty insurers, with Gartner anticipating annual growth of 6.5% through 2019.
  • Guidewire’s 162 live customer count dwarfs those of its closest competitors.
  • GWRE quarterly revenue growth was 3.30%, higher than the industry and sector average revenue growth (1.70% and 0.89%, respectively). See GWRE revenue growth chart.
  • GWRE cash to debt ratio is 2.39, higher than the average industry (0.19) and sector (0.17) cash to debt ratio. See GWRE cash to debt chart.

4. What are the reasons to sell GWRE? Why should I sell GWRE stock?

Let's look at the reasons to sell GWRE stock (i.e., the bear case):

  • Large insurers could choose to use and simply upgrade existing legacy systems, limiting Guidewire’s ability to penetrate those firms.
  • Direct competitors such as Duck Creek or firms with abundant resources such as SAP could choose to invest more heavily in building out a full-feature solution in the insurance vertical, which could infringe on Guidewire’s ability to win new customers.
  • Large-scale disasters such as Hurricane Katrina in 2005 or the Fukushima disaster in 2011 can have severe ramifications for profitability in the P&C insurance industry and could affect spending decisions.
  • GWRE profitability is declining. The YoY profit margin change was -7.10 percentage points. See GWRE profitability chart.
  • GWRE forward P/E ratio is 119.92, which is high compared to its industry peers’ P/E ratios. See GWRE forward P/E ratio chart.
  • GWRE Price/Sales ratio is 13.84, which is high compared to its industry peers’ P/S ratios. See GWRE forward Price/Sales ratio chart.
  • GWRE PEG ratio (P/E adjusted for growth) is 8.87, which is high compared to its industry peers’ PEG ratios. See GWRE PEG chart.
  • GWRE short share of float is 5.70%. The stock is much more frequently shorted than the average industry, sector or S&P 500 stock. See GWRE short share of float chart.
  • GWRE short interest (days to cover the shorts) ratio is 9.69. The stock garners more short interest than the average industry, sector or S&P 500 stock. See GWRE short interest ratio chart.

Key Stats

5. What are GWRE key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for GWRE:

Metrics GWRE
Price $105.62
Average Price Target / Upside $128.80 / 21.95%
Average Analyst Rating Buy
Forward Dividend Yield 0.00%
Industry Software - Infrastructure
Sector Technology
Number of Employees 2,292
Market Cap $8.58B
Forward P/E Ratio 250.80
Price/Book Ratio 11.56
Revenue (TTM) $742.31M
YoY Quarterly Revenue Growth 17.20%
Profit Margin -3.66%

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