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Guidewire (GWRE) AI Stock Analysis

GWRE

Guidewire

(NYSE:GWRE)

Select Model
Rating:74Outperform
Price Target:$206.00â–²(24.86% 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 growthThe 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 executionThe 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.

Guidewire Key Performance Indicators (KPIs)

Revenue By SegmentShows how much revenue each business segment generates, providing insight into the company's strategic focus and areas of growth or decline.

$0.00$100.00M$200.00M$300.00M$400.00MJan 21Apr 21Jul 21Oct 21Jan 22Apr 22Jul 22Oct 22Jan 23Apr 23Jul 23Oct 23Jan 24Apr 24Jul 24Oct 24Jan 25Apr 25Jul 25Oct 25Jan 26Apr 26Jul 26
Chart Insights

Guidewire’s growth is increasingly anchored by Subscription & Support, which has accelerated steadily and provides improving revenue visibility. License revenue remains highly cyclical, with sharp alternating peaks suggesting deal timing rather than durable momentum. Services has recovered from its earlier weakness but remains uneven, including a recent pullback. This mix shift toward recurring revenue is strategically positive, reducing dependence on volatile upfront licenses, though investors should monitor whether services can scale alongside subscription adoption without becoming a growth constraint.

Data provided by:The Fly

Guidewire (GWRE) vs. SPDR S&P 500 ETF (SPY)

-60%-50%-40%-30%-20%-10%0%10%20%GWRE-27.02%SPY+11.79%Dec '25Jan '26Feb '26Mar '26Apr '26May '26Jun '26Jul '26Aug '26Sep '26Oct '26
Market Cap
$13.33B
Dividend Yield
―
Average Volume (3M)
1.30M
Price to Earnings (P/E)
98.5
Beta (1Y)
0.90
Revenue Growth
22.70%
EPS Growth
99.66%
Country
US
Employees
4,174
Sector
Technology
Sector Strength
61
Industry
Software - Application

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 PolicyC...

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 (clou...

Guidewire Earnings Call Summary

Earnings Call Date:Sep 02, 2026(Q4-2026)|% Change Since:-18.67%|Next Earnings Date:Dec 02, 2026
Earnings Call SentimentPositive

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.

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

Strong overall fundamentals driven by sharp margin expansion and a return to meaningful profitability, supported by very solid and improving operating/free cash flow. Offsetting factors are modest/volatile recent revenue growth and a notable uptick in leverage, which reduces flexibility if operating momentum slows.

Income Statement

78Positive

Balance Sheet

66Positive

Cash Flow

85Very Positive
Financial statement breakdown
BreakdownTTMJul 2026Jul 2025Jul 2024Jul 2023Jul 2022
Income Statement
Total Revenue1.48B1.48B1.20B980.50M905.34M812.61M
Gross Profit947.37M947.37M752.05M583.36M458.21M377.18M
EBITDA213.90M205.39M86.36M2.21M-102.54M-176.73M
Net Income139.28M139.28M69.80M-6.10M-111.86M-180.43M
Balance Sheet
Total Assets2.58B2.58B2.72B2.23B2.03B2.27B
Cash, Cash Equivalents and Short-Term Investments753.06M753.06M1.15B1.00B798.68M976.17M
Total Debt703.30M703.30M715.69M442.92M448.58M475.58M
Total Liabilities1.38B1.38B1.26B883.56M828.42M815.24M
Stockholders Equity1.19B1.19B1.46B1.34B1.20B1.45B
Cash Flow
Free Cash Flow290.25M377.66M295.13M177.22M20.97M-59.72M
Operating Cash Flow312.00M389.72M300.87M195.75M38.40M-37.94M
Investing Cash Flow-486.41M-135.98M-236.97M-52.36M12.71M312.21M
Financing Cash Flow-224.73M-578.98M82.29M1.05M-261.58M-37.34M

Guidewire Technical Analysis

Technical Analysis SentimentNeutral
Last Price164.98

Price Trends

50DMA167.03Negative
100DMA155.06Positive
200DMA148.98Positive

Market Momentum

MACD2.36Positive
RSI45.71Neutral
STOCH8.43Positive

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 164.98 is below the 20-day moving average (MA) of 171.11, below the 50-day MA of 167.03, and above the 200-day MA of 148.98, indicating a neutral trend. The MACD of 2.36 indicates Positive momentum. The RSI at 45.71 is Neutral, neither overbought nor oversold. The STOCH value of 8.43 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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.

Higher RiskSector Avg.Lower RiskFinance & CorporateTech & InnovationLegal & RegulatoryProductionAbility to SellMacro & Political
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added

1 New Risk
1.4949Part II – Other InformationPart II – Other InformationPart II – Other InformationQ1, 2025

Guidewire Peers Comparison

Overall Rating

UnderperformOutperform
Sector (61)

Financial Indicators

GWRE against its peers
NameOverall RatingMarket CapP/E RatioROEDividend YieldRevenue GrowthEPS Growth
NICENICE81Outperform$6.58B16.1711.28%―8.08%-18.39%
GWREGWRE74Outperform$13.44B98.5410.03%―22.70%99.66%
PEGAPEGA74Outperform$5.55B19.5045.30%0.60%0.93%7.44%
SSNCSSNC74Outperform$18.86B22.5212.60%1.38%8.75%2.60%
FICOFICO66Neutral$15.36B20.43-33.43%―24.09%34.17%
CXMCXM63Neutral$1.58B71.164.29%―6.35%-79.74%
Sector *61Neutral$37.18B12.37-10.20%1.83%8.50%-7.62%

* Technology Sector Average

Performance Comparison

-60%-40%-20%0%GWREFICONICEPEGASSNCCXMDec '25Jan '26Feb '26Mar '26Apr '26May '26Jun '26Jul '26Aug '26Sep '26Oct '26
GWRE and its peers over the selected period
Show on chartTickerCompany NamePriceChange% Change
GWREGuidewire Software Inc.162.59-65.40-28.69%
FICOFair Isaac Corporation711.23-939.28-56.91%
NICENice Ltd.113.76-21.78-16.07%
PEGAPegasystems33.93-28.70-45.83%
SSNCSs&C Technologies Holdings80.39-3.15-3.77%
CXMSprinklr, Inc.6.81-0.91-11.79%

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. Hyperexponential&#...

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 cust...

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, underscor...

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.

Date of analysis: Oct 27, 2026