Guidewire’s High Valuation and Limited Upside Potential: Sell Rating Reiterated

Guidewire (GWRE – Research Report), the Technology sector company, was revisited by a Wall Street analyst today. Analyst Michael Funk from Bank of America Securities reiterated a Sell rating on the stock and has a $160.00 price target.

Michael Funk’s rating is based on Guidewire’s current stock valuation, which appears to be quite high relative to its peers. Despite the company’s strong quarterly performance and positive revisions in revenue and operating income guidance, the stock is trading at an expensive 13x CY26E EV/Revenue multiple. This valuation is among the highest in the software sector, which raises concerns about the risk/reward balance for investors.
While Guidewire has demonstrated impressive execution and momentum, including securing significant deals with large insurers and increasing cloud adoption, Funk remains cautious. The elevated stock price, despite the company’s achievements, suggests limited upside potential. Therefore, he reiterates a Sell rating, indicating a belief that the stock’s current market price may not be sustainable in the long term.

Based on the recent corporate insider activity of 91 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of GWRE in relation to earlier this year.