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Guidewire
(NYSE:GWRE)
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Rating:72Outperform
Price Target:
$180.00
▼(-5.79% Downside)
Action:Reiterated
Date:09/06/26
GWRE’s score is driven primarily by improving financial performance (notably strong and high-quality cash generation alongside margin expansion) and a bullish-leaning earnings update with raised revenue and cash flow guidance. The main constraint is valuation (very high P/E with no dividend support), while technical signals are mixed with weak near-term momentum despite a constructive longer-term trend.
Positive Factors
Recurring ARR growth
Strong ARR growth supports a durable recurring-revenue model and indicates continued customer adoption of Guidewire’s cloud platform. Management also cited fully ramped ARR growing faster than ARR, which can strengthen the company’s growth base over coming quarters.
Negative Factors
Large-deal concentration
Dependence on a limited number of large transformational transactions makes reported ARR and bookings more lumpy than a broadly distributed sales base. Slippage can shift revenue and recurring commitments between periods, increasing execution sensitivity even when underlying demand remains intact.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring ARR growth
Strong ARR growth supports a durable recurring-revenue model and indicates continued customer adoption of Guidewire’s cloud platform. Management also cited fully ramped ARR growing faster than ARR, which can strengthen the company’s growth base over coming quarters.
Read all positive factors
Guidewire Key Performance Indicators (KPIs)
Any
Revenue By Segment
Shows how much revenue each business segment generates, providing insight into the company's strategic focus and areas of growth or decline.
Shows how much revenue each business segment generates, providing insight into the company's strategic focus and areas of growth or decline.
Data provided by:
The Fly
The FlyGuidewire (GWRE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$13.52B
Dividend YieldN/A
Average Volume (3M)1.30M
Price to Earnings (P/E)98.4
Beta (1Y)0.77
Revenue Growth22.70%
EPS Growth99.66%
CountryUS
Employees4,049
SectorGeneral
Sector StrengthN/A
IndustrySoftware - Application
Share Statistics
EPS (TTM)1.65
Shares Outstanding83,256,360
10 Day Avg. Volume1,711,126
30 Day Avg. Volume1,302,250
Financial Highlights & Ratios
PEG Ratio0.93
Price to Book (P/B)10.55
Price to Sales (P/S)8.53
P/FCF Ratio33.34
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$216.45Price Target Upside13.29% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering13
EPS Forecast (FY)4.1
Revenue Forecast (FY)$1.70B
Guidewire Business Overview & Revenue Model
Company Description
Guidewire Software, Inc. is a global supplier of software solutions tailored for the property and casualty insurance industry. Its primary offering is Guidewire InsuranceSuite, a comprehensive platform that incorporates core applications like Poli...
How the Company Makes Money
Guidewire primarily makes money by selling and supporting its P&C insurance software platform, with revenue generally coming from (1) subscription and support and (2) services. Subscription revenue is generated from customers using Guidewire’s clo...
Guidewire Earnings Call Summary
Earnings Call Date:Jun 04, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Dec 03, 2026
Earnings Call Sentiment Positive
The call presented multiple strong financial beats and upgrades (27% revenue growth, ARR +19% YoY, improved margins, increased revenue and cash flow guidance), meaningful product momentum (cloud wins, PricingCenter, ProNavigator), and tangible productivity gains from AI tooling (3,000-attendee developer summit; ~35% migration improvement). The primary negatives were quarter-to-quarter timing/close volatility driven by a small number of large deals, modest services margin pressure from subcontractor usage, and early-stage uncertainty around LLM token costs. On balance, the positives (financial beats, upgraded guidance, product/customer traction, and operational productivity gains) materially outweigh the limited operational and timing risks noted.Positive Updates
Strong ARR Growth
ARR finished Q3 at $1.147B, up ~19% year-over-year and within guidance; company reiterates FY ARR outlook of $1.229B–$1.237B (18%–19% growth). Management highlighted fully-ramped ARR growing faster than ARR, supporting durable growth.
Negative Updates
Quarterly ARR Timing and Deal Slippage
Management noted a few expected deals slipped out of Q3 causing ARR to land 'within guidance' rather than ahead; attributed to timing volatility from a relatively small number of large, discrete deals rather than a demand slowdown.
Read all updates
Q3-2026 Updates
Positive
Negative
Strong ARR Growth
ARR finished Q3 at $1.147B, up ~19% year-over-year and within guidance; company reiterates FY ARR outlook of $1.229B–$1.237B (18%–19% growth). Management highlighted fully-ramped ARR growing faster than ARR, supporting durable growth.
Read all positive updates
Company Guidance
Guidewire maintained FY‑2026 guidance calling for ARR of $1.229–$1.237 billion (18–19% YoY) after Q3 ARR of $1.147B (up 19% YoY) and raised total revenue guidance to $1.46–$1.47 billion (midpoint ≈22% growth); subscription & support revenue is expected to be $963–$969M (subscription & support gross margin ~74%), services revenue ~ $270M (services gross margin ~14%), and overall gross margin ~67%. They forecast GAAP operating income of $124–$134M and non‑GAAP operating income of $314–$324M, stock‑based compensation of ~ $182M (~13% YoY), operating cash flow of $365–$380M, and capital expenditures of $30–$35M (including ~ $18M capitalized software). Q3 actuals supporting the guide were: total revenue $373M (+27% YoY), subscription & support $245M (+35%), services $72M (+32%), gross profit $247M (+29%), overall gross margin 66%, operating profit $78M, operating cash flow $61M, cash/cash equivalents/investments $1.15B, and 1.7M shares repurchased at an average $147.07 with $241M remaining on the buyback authorization.Guidewire Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
66
Positive
Cash Flow
85
Very Positive
| Breakdown | Jul 2026 | Jul 2025 | Jul 2024 | Jul 2023 | Jul 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.48B | 1.20B | 980.50M | 905.34M | 812.61M |
| Gross Profit | 947.37M | 752.05M | 583.36M | 458.21M | 377.18M |
| EBITDA | 213.90M | 86.36M | 2.21M | -102.54M | -176.73M |
| Net Income | 139.28M | 69.80M | -6.10M | -111.86M | -180.43M |
Balance Sheet | |||||
| Total Assets | 2.58B | 2.72B | 2.23B | 2.03B | 2.27B |
| Cash, Cash Equivalents and Short-Term Investments | 753.06M | 1.15B | 1.00B | 798.68M | 976.17M |
| Total Debt | 703.30M | 715.69M | 442.92M | 448.58M | 475.58M |
| Total Liabilities | 1.38B | 1.26B | 883.56M | 828.42M | 815.24M |
| Stockholders Equity | 1.19B | 1.46B | 1.34B | 1.20B | 1.45B |
Cash Flow | |||||
| Free Cash Flow | 377.66M | 295.13M | 177.22M | 20.97M | -59.72M |
| Operating Cash Flow | 389.72M | 300.87M | 195.75M | 38.40M | -37.94M |
| Investing Cash Flow | -135.98M | -236.97M | -52.36M | 12.71M | 312.21M |
| Financing Cash Flow | -583.21M | 82.29M | 1.05M | -261.58M | -37.34M |
Guidewire Technical Analysis
Negative
191.07
Price Trends
160.79
Positive
147.19
Positive
157.07
Positive
Market Momentum
8.77
Positive
41.45
Neutral
45.86
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GWRE, the sentiment is Negative. The current price of 191.07 is above the 20-day moving average (MA) of 186.25, above the 50-day MA of 160.79, and above the 200-day MA of 157.07, indicating a neutral trend. The MACD of 8.77 indicates Positive momentum. The RSI at 41.45 is Neutral, neither overbought nor oversold. The STOCH value of 45.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GWRE.
Guidewire Risk Analysis
Guidewire disclosed 54 risk factors in its most recent earnings report. Guidewire reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Guidewire Peers Comparison
UnderperformOutperform
Sector (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $6.30B | 15.47 | 11.28% | 0.92% | 8.08% | -18.39% | |
72 Outperform | $13.52B | 98.44 | 10.03% | ― | 22.70% | 99.66% | |
72 Outperform | $20.13B | 26.78 | -33.43% | 0.06% | 24.09% | 34.17% | |
72 Outperform | $6.14B | 19.66 | 48.90% | 0.54% | 3.60% | 48.92% | |
72 Outperform | $19.63B | 23.37 | 12.66% | 1.33% | 8.57% | 9.06% | |
68 Neutral | $1.37B | 61.76 | 4.29% | ― | 6.35% | -79.74% | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% |
* General Sector Average
GWRE
Guidewire
162.42
-99.46
-37.98%
FICO
Fair Isaac
932.26
-605.94
-39.39%
NICE
NICE
105.50
-37.45
-26.20%
PEGA
Pegasystems
37.36
-19.84
-34.68%
SSNC
SS&C Technologies Holdings
83.65
-3.95
-4.51%
CXM
Sprinklr
5.91
-2.00
-25.28%
Guidewire Corporate Events
Business Operations and StrategyExecutive/Board ChangesStock BuybackFinancial Disclosures
Guidewire announces leadership transition as CAO plans retirement
Positive
Sep 3, 2026
Guidewire reported strong results for the fiscal year ended July 31, 2026, highlighted by a 23% rise in total revenue to $1.48 billion, 19% growth in annual recurring revenue on a constant currency basis, and record-low ARR gross attrition, unders...
Business Operations and StrategyExecutive/Board Changes
Guidewire appoints AI-focused insurance executive to board
Positive
Jul 22, 2026
On July 17, 2026, Guidewire Software’s board appointed veteran insurance executive and AI transformation specialist Dr. Alexander Vollert as a director, with his term beginning August 1, 2026, following a press announcement on July 22, 2026....
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.