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Guidewire
(NYSE:GWRE)
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Rating:74Outperform
Price Target:
$206.00
▲(7.81% Upside)
Action:Reiterated
Date:10/27/26
The score is supported primarily by improved profitability and strong cash generation, reinforced by a very positive earnings outlook for ARR/subscription growth and solid uptrend technicals. The main constraint is valuation (very high P/E) alongside added execution/leverage risk from the large acquisition and a continued shift away from license/support revenue.
Positive Factors
Cloud recurring growth
The rising cloud share strengthens recurring revenue visibility and embeds Guidewire more deeply in insurers’ operating workflows. This mix shift can support durable retention, scalable delivery, and more predictable growth as customers continue modernizing core insurance systems.
Negative Factors
Acquisition leverage and execution
The large Hyperexponential acquisition adds meaningful integration and execution demands while increasing debt obligations. Guidewire must realize the promised AI and ARR benefits without weakening margins or financial flexibility, particularly as the transaction combines a new platform with its existing cloud portfolio.
Read all positive and negative factors
Positive Factors
Negative Factors
Cloud recurring growth
The rising cloud share strengthens recurring revenue visibility and embeds Guidewire more deeply in insurers’ operating workflows. This mix shift can support durable retention, scalable delivery, and more predictable growth as customers continue modernizing core insurance systems.
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
$13.87B
Dividend YieldN/A
Average Volume (3M)1.22M
Price to Earnings (P/E)102.5
Beta (1Y)0.87
Revenue Growth22.70%
EPS Growth99.66%
CountryUS
Employees4,174
SectorGeneral
Sector StrengthN/A
IndustrySoftware - Application
Share Statistics
EPS (TTM)1.65
Shares Outstanding81,992,670
10 Day Avg. Volume1,083,970
30 Day Avg. Volume1,224,773
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 Cap0.91
Enterprise Value/Revenue8.59
Enterprise Value/Gross Profit13.37
Enterprise Value/Ebitda59.22
Forecast
1Y Price Target
$212.30Price Target Upside11.11% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering12
EPS Forecast (FY)4.19
Revenue Forecast (FY)$1.72B
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 subscription access to its cloud software products and by providing services associated with deploying and operating those products for insurance customers.
Key revenue streams:
1) Subscription revenue (...
Guidewire Earnings Call Summary
Earnings Call Date:Sep 03, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Dec 03, 2026
Earnings Call Sentiment Positive
The call was strongly positive, characterized by record ARR, robust subscription and cloud growth, significant core-cloud deal momentum, strong profitability and cash flow, very low attrition, and encouraging traction for ProNavigator, PricingCenter and the company's AI platform. The main negative factors were the expected decline in license and support revenue as customers migrate to the cloud, lower services margins, normalized attrition assumptions and first-quarter timing-related margin and cash flow effects. Highlights significantly outweighed lowlights.Positive Updates
Record ARR and Fully Ramped ARR Growth
ARR ended fiscal 2026 at $1.242 billion, up 19% year-over-year and above the high end of guidance. Fully ramped ARR grew 22% year-over-year, marking the fourth consecutive year that fully ramped ARR growth outpaced ARR growth.
Negative Updates
License Revenue Decline
Fiscal 2026 license revenue was $235 million, down 7% year-over-year as migration activity continued. Guidewire expects fiscal 2027 license revenue of approximately $189 million, a decline of $46 million year-over-year, including an almost $50 million decline in term license revenue from recent cloud migration customers.
Read all updates
Q4-2026 Updates
Positive
Negative
Record ARR and Fully Ramped ARR Growth
ARR ended fiscal 2026 at $1.242 billion, up 19% year-over-year and above the high end of guidance. Fully ramped ARR grew 22% year-over-year, marking the fourth consecutive year that fully ramped ARR growth outpaced ARR growth.
Read all positive updates
Company Guidance
For fiscal 2027, Guidewire expects ARR of between $1.45 billion and $1.46 billion, representing 18% constant currency growth at the midpoint; total revenue of between $1.707 billion and $1.727 billion; subscription revenue to grow approximately 31%; subscription and support revenue of between $1.240 billion and $1.246 billion, representing 28% growth at the midpoint, with support revenue expected to decline about $8 million; license revenue of approximately $189 million, a decline of $46 million year-over-year, including term license revenue from recent cloud migration customers declining by almost $50 million; services revenue of approximately $285 million; subscription and support gross margins between 75% and 76%, professional services gross margin of approximately 12%, and total gross margins between 67% and 68%; non-GAAP operating income of between $403 million and $423 million, GAAP operating income of between $197 million and $217 million, stock-based compensation expense of approximately $202 million, cash flow from operations of between $445 million and $465 million, and CapEx of between $23 million and $28 million, including approximately $17 million in capitalized software development costs. For Q1, Guidewire expects ARR to be between $1.253 billion and $1.259 billion, subscription and support revenue between $279 million and $283 million, subscription and support margin around 77%, approximately $4 million in credit from its cloud infrastructure provider, services revenue of approximately $65 million, services margin around breakeven, and total gross margins of approximately 65%.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 | 205.39M | 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 | -578.98M | 82.29M | 1.05M | -261.58M | -37.34M |
Guidewire Technical Analysis
Positive
191.07
Price Trends
168.05
Positive
154.05
Positive
149.19
Positive
Market Momentum
6.03
Negative
49.78
Neutral
57.71
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GWRE, the sentiment is Positive. The current price of 191.07 is above the 20-day moving average (MA) of 169.13, above the 50-day MA of 168.05, and above the 200-day MA of 149.19, indicating a bullish trend. The MACD of 6.03 indicates Negative momentum. The RSI at 49.78 is Neutral, neither overbought nor oversold. The STOCH value of 57.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
81 Outperform | $7.30B | 17.65 | 11.28% | 0.92% | 8.08% | -18.39% | |
74 Outperform | $13.87B | 102.52 | 10.03% | ― | 22.70% | 99.66% | |
74 Outperform | $5.78B | 20.30 | 45.30% | 0.57% | 0.93% | 7.44% | |
74 Outperform | $18.82B | 22.47 | 12.60% | 1.38% | 8.75% | 2.60% | |
72 Outperform | $14.94B | 19.87 | -33.43% | 0.06% | 24.09% | 34.17% | |
64 Neutral | $1.55B | 70.99 | 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
169.15
-83.88
-33.15%
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SSNC
SS&C Technologies Holdings
80.22
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CXM
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6.68
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-13.92%
Guidewire Corporate Events
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
Guidewire to Acquire AI Underwriting Firm Hyperexponential
Positive
Oct 27, 2026
On October 27, 2026, Guidewire signed a definitive agreement to acquire London-based Hyperexponential Ltd for a base cash price of $1.7 billion, plus up to $400 million in contingent consideration tied to recurring revenue targets. Hyperexponentia...
Business Operations and StrategyFinancial Disclosures
Guidewire expands top-tier insurer partnership on Cloud platform
Positive
Sep 30, 2026
On September 4, 2026, Guidewire Software, Inc. entered into a new multi-year agreement with a top ten U.S.-based insurance carrier to support the carrier’s personal lines book of business on Guidewire Cloud and PolicyCenter, elevating this c...
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...
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.