Guidewire (GWRE) AI Stock Analysis

• Market Cap: $19.75B
• Dividend Yield: N/A
• Average Volume (3M): 674.42K
• Price to Earnings (P/E): 292.5
• Beta (1Y): 0.83
• Revenue Growth: 22.64%
• EPS Growth: N/A
• Country: US
• Employees: 3,507
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.84
• Shares Outstanding: 84,530,580
• 10 Day Avg. Volume: 756,375
• 30 Day Avg. Volume: 674,425
• PEG Ratio: -0.22
• Price to Book (P/B): 13.02
• Price to Sales (P/S): 15.77
• P/FCF Ratio: 64.27
• Enterprise Value/Market Cap: 0.97
• Enterprise Value/Revenue: 15.87
• Enterprise Value/Gross Profit: 25.37
• Enterprise Value/Ebitda: 220.93
• 1Y Price Target: $274.58
• Price Target Upside: 17.52% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

• Rating: 69 Neutral
• Price Target: $249.00 ▲(6.57% Upside)

Guidewire's strong financial performance and positive earnings call sentiment are the most significant factors driving the stock score. The company's robust ARR growth and cloud transformation highlight its strategic direction. However, the high P/E ratio suggests potential overvaluation, and mixed technical indicators reflect uncertainty in short-term price movements.

Positive Factors

Cloud Transformation

The shift to cloud services represents a structural change in Guidewire's business model, enhancing scalability and recurring revenue streams, which are crucial for long-term growth and competitiveness in the insurance technology sector.

Revenue Growth

Strong revenue growth, particularly in subscription services, indicates robust demand for Guidewire's offerings and supports sustained financial health, allowing for reinvestment in innovation and market expansion.

Strategic Partnerships

Long-term partnerships with major insurers like Liberty Mutual enhance Guidewire's market position and provide a stable revenue base, fostering innovation and competitive advantage in the insurance software industry.

Negative Factors

Decline in License Revenue

The anticipated decline in license revenue due to cloud migrations could impact short-term cash flow and necessitates successful cloud adoption to offset revenue losses, posing a risk to financial stability.

Profitability Margins

Low net profit margins indicate potential challenges in cost management and profitability, which could limit Guidewire's ability to invest in growth initiatives and maintain competitive pricing strategies.

Support Revenue Decline

The decline in support revenue highlights the transitional challenges associated with shifting to a cloud-based model, potentially affecting short-term financial performance and requiring effective customer retention strategies.

Guidewire Business Overview & Revenue Model

Company Description

Guidewire Software, Inc. is a leading provider of software solutions for property and casualty (P&C) insurers. The company operates primarily in the insurance technology sector, offering a suite of products that enable insurers to manage their operations, from underwriting and policy administration to claims management and billing. Guidewire's core products include Guidewire InsuranceSuite, Guidewire Digital, and Guidewire Analytics, all designed to help insurers improve efficiency, enhance customer experience, and drive profitability in a competitive market.

How the Company Makes Money

Guidewire generates revenue primarily through the sale of software licenses, subscriptions, and professional services. The company offers its InsuranceSuite and other products through a combination of on-premise licenses and cloud-based subscriptions, with cloud services being a growing segment of its revenue. Professional services, including implementation, training, and support, contribute significantly to the overall revenue stream. Additionally, Guidewire has established partnerships with various technology providers and consulting firms, enhancing its market reach and enabling it to provide comprehensive solutions to insurers. These partnerships often lead to joint marketing efforts, integrations, and collaborative projects that further drive revenue growth.

Guidewire Financial Statement Overview

Summary

Guidewire exhibits a solid financial performance with consistent revenue growth and improving profitability metrics. The balance sheet is stable with manageable leverage, and the company demonstrates strong cash flow generation. While profitability margins can be enhanced, the current financial health supports future growth and investment opportunities.

Income Statement

Guidewire's income statement shows a positive trajectory with a revenue growth rate of 5.72% in the latest year, indicating a steady increase in sales. The gross profit margin improved to 62.54%, reflecting efficient cost management. However, the net profit margin is relatively low at 5.81%, suggesting room for improvement in profitability. The EBIT and EBITDA margins have turned positive, indicating operational improvements.

Balance Sheet

The balance sheet reflects a moderate debt-to-equity ratio of 0.48, indicating a balanced approach to leveraging. The return on equity is low at 4.79%, suggesting limited returns on shareholder investments. The equity ratio stands at 53.56%, showcasing a strong equity base relative to total assets, which enhances financial stability.

Cash Flow

Guidewire's cash flow statement highlights a robust free cash flow growth rate of 23.58%, indicating strong cash generation capabilities. The operating cash flow to net income ratio is 0.55, demonstrating efficient conversion of earnings into cash. The free cash flow to net income ratio is high at 0.98, reflecting effective cash management and potential for reinvestment or debt reduction.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.20B	1.20B	980.50M	905.34M	812.61M	743.27M
Gross Profit	752.05M	752.05M	583.36M	458.21M	377.18M	389.56M
EBITDA	86.36M	86.36M	2.21M	-102.54M	-176.73M	-48.62M
Net Income	69.80M	69.80M	-6.10M	-111.86M	-180.43M	-66.51M
Balance Sheet
Total Assets	2.72B	2.72B	2.23B	2.03B	2.27B	2.32B
Cash, Cash Equivalents and Short-Term Investments	1.15B	1.15B	1.00B	798.68M	976.17M	1.12B
Total Debt	705.25M	705.25M	442.92M	448.58M	475.58M	470.82M
Total Liabilities	1.26B	1.26B	883.56M	828.42M	815.24M	776.95M
Stockholders Equity	1.46B	1.46B	1.34B	1.20B	1.45B	1.54B
Cash Flow
Free Cash Flow	290.89M	295.13M	177.22M	20.97M	-59.72M	82.73M
Operating Cash Flow	300.87M	300.87M	195.75M	38.40M	-37.94M	111.59M
Investing Cash Flow	-236.97M	-236.97M	-52.36M	12.71M	312.21M	64.19M
Financing Cash Flow	82.29M	82.29M	1.05M	-261.58M	-37.34M	-159.39M

Guidewire Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 233.64
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GWRE, the sentiment is Neutral. The current price of 233.64 is below the 20-day moving average (MA) of 242.69, below the 50-day MA of 238.24, and above the 200-day MA of 217.71, indicating a neutral trend. The MACD of 1.56 indicates Positive momentum. The RSI at 40.98 is Neutral, neither overbought nor oversold. The STOCH value of 7.63 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GWRE.

Guidewire Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PAYC	―	$10.83B	25.31	25.76%	0.80%	10.21%	-10.56%
ZM	―	$26.11B	22.98	13.60%	―	3.63%	36.57%
DOCU	―	$14.71B	55.18	14.23%	―	8.29%	-71.36%
GWRE	―	$19.75B	292.53	4.99%	―	22.64%	―
BSY	―	$15.43B	64.95	23.69%	0.53%	10.45%	-32.43%
TYL	―	$20.49B	66.32	9.17%	―	10.62%	31.43%
Sector *	―	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Guidewire Corporate Events

Guidewire Software’s Earnings Call Highlights Robust Growth

Guidewire Software Inc. recently held its earnings call, revealing a strong performance marked by significant growth in Annual Recurring Revenue (ARR) and increasing demand for its cloud platform. Despite these positive developments, the company acknowledged some challenges, particularly concerning potential declines in license revenue due to ongoing migrations.

Guidewire Software Reports Strong Fiscal Year 2025 Results

Guidewire Software Inc. is a leading provider of software products for property and casualty (P&C) insurers, offering a cloud-based platform that integrates data, analytics, and artificial intelligence to help insurers innovate and grow efficiently.