Guidewire Software Inc. (GWRE)
NYSE:GWRE
Top Page
Guidewire
(NYSE:GWRE)
Select Model
Select Model
Rating:72Outperform
Price Target:
$164.00
▲(12.27% Upside)
Action:ReiteratedDate:03/06/26
The score is driven mainly by improving financial performance (profitability inflection and strong free cash flow) and a notably strong earnings update with raised guidance, high retention, and expanding backlog/RPO. These positives are tempered by weaker longer-term technical positioning (below 100/200DMA with negative MACD) and a relatively expensive valuation (P/E ~49.7, no dividend yield provided).
Positive Factors
High ARR growth and retention
Sustained ARR growth and >99% retention provide durable, predictable recurring revenue and multiyear visibility. Fully‑ramped ARR outpacing reported ARR signals long lead SaaS economics and increasing contract scale that support steady revenue conversion and lower churn risk.
Negative Factors
Low services gross margin
Services remain a structurally lower‑margin part of revenue, limiting blended gross margins when implementation demand spikes. Because cloud migrations and professional services are integral to large deals, sustained services mix can cap companywide margin expansion and earnings leverage.
Read all positive and negative factors
Positive Factors
Negative Factors
High ARR growth and retention
Sustained ARR growth and >99% retention provide durable, predictable recurring revenue and multiyear visibility. Fully‑ramped ARR outpacing reported ARR signals long lead SaaS economics and increasing contract scale that support steady revenue conversion and lower churn risk.
Read all positive factors
Guidewire (GWRE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$12.37B
Dividend YieldN/A
Average Volume (3M)1.61M
Price to Earnings (P/E)49.7
Beta (1Y)0.81
Revenue Growth22.80%
EPS Growth198.93%
CountryUS
Employees3,507
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)1.17
Shares Outstanding84,657,470
10 Day Avg. Volume858,325
30 Day Avg. Volume1,608,958
Financial Highlights & Ratios
PEG Ratio-0.22
Price to Book (P/B)13.02
Price to Sales (P/S)15.77
P/FCF Ratio64.27
Enterprise Value/Market Cap0.96
Enterprise Value/Revenue8.89
Enterprise Value/Gross Profit13.95
Enterprise Value/Ebitda60.45
Forecast
1Y Price Target
$229.90Price Target Upside57.38% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering11
EPS Forecast (FY)3.52
Revenue Forecast (FY)$1.44B
Guidewire Business Overview & Revenue Model
Company Description
Guidewire Software, Inc. provides software products for property and casualty insurers worldwide. The company offers Guidewire InsuranceSuite comprising Guidewire PolicyCenter, BillingCenter, and ClaimCenter applications. It also provides Guidewir...
How the Company Makes Money
Guidewire primarily makes money by selling and supporting its insurance software products, increasingly delivered via subscription-based cloud offerings. The company’s main revenue streams include: (1) Subscription revenue from Guidewire Cloud and...
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 Earnings Call Summary
Earnings Call Date:Mar 05, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Jun 09, 2026
Earnings Call Sentiment Positive
The call conveyed strong operational and financial momentum: high ARR and revenue growth (22% ARR, 24% revenue), expanding fully ramped ARR, a large RPO backlog (+63% YoY), excellent retention (>99%), notable enterprise customer wins/expansions, product traction (PricingCenter, data & analytics, ProNavigator) and raised full-year guidance. Key caveats include still-low services gross margins (though improving), backend ARR seasonality with Q4 weighting, moderating true-up tailwinds, longer sales cycles for some new products, and higher compensation-related expenses. Overall the positives materially outweigh the challenges.Positive Updates
Strong ARR Growth and Fully Ramped Momentum
ARR ended Q2 at $1.121 billion, up 22% year-over-year (21% on a constant currency basis). Fully ramped ARR finished the quarter at $1.42 billion and continues to grow faster than reported ARR, reflecting multiyear ramp dynamics and larger, longer-duration contract commitments.
Negative Updates
Low Services Gross Margin (Although Improving)
Services gross margin in Q2 was 9%, up from 6% year-over-year but still low relative to subscription margins. Services gross margin is expected to improve to roughly 13% for the full year, indicating services remain a lower-margin component of revenue.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong ARR Growth and Fully Ramped Momentum
ARR ended Q2 at $1.121 billion, up 22% year-over-year (21% on a constant currency basis). Fully ramped ARR finished the quarter at $1.42 billion and continues to grow faster than reported ARR, reflecting multiyear ramp dynamics and larger, longer-duration contract commitments.
Read all positive updates
Company Guidance
Guidewire raised FY26 guidance after a strong Q2: ARR ended Q2 at $1.121B (up 22% YoY / 21% CC) with fully ramped ARR $1.42B, and management now expects FY26 ARR of $1.229–1.237B (18–19% growth) and total revenue of $1.438–1.448B (midpoint ≈+20% YoY), with subscription & support revenue $962–966M and services ≈$255M; RPO finished Q2 at $3.5B (+63% YoY) and InsuranceSuite TTM ARR retention was >99%. Q3 guidance: ARR $1.144–1.150B, revenue $352–358M, subscription & support $239–243M, services ≈$60M, and non‑GAAP operating income $59–65M. Margin and profitability outlook: FY subscription & support gross margin ≈74%, services gross margin ≈13%, overall gross margin ≈67%; FY GAAP operating income $100–110M and non‑GAAP operating income $293–303M; stock‑based comp ≈$185M (+15% YoY); operating cash flow guidance $360–375M; CapEx $30–35M (including ≈$18M capitalized software). Q2 results that underpinned the raise included revenue $359M (+24% YoY), subscription & support $237M (+33%), services $62M (+30%), gross profit $243M (+28%), overall gross margin 68% (subscription margin 75%; services 9%), operating profit $87M, operating cash flow $112M, cash & investments >$1.35B, $148M of buybacks this quarter with $490M remaining on a new $500M authorization; other deal metrics included 15 InsuranceSuite Cloud and 2 InsuranceNow deals, 9 ProNavigator deals, 25 data & analytics deals, 3 new customers, and 96 customers with >$5M fully‑ramped ARR (vs. 35 in 2021).Guidewire Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
72
Positive
Cash Flow
85
Very Positive
| Breakdown | TTM | Jul 2025 | Jul 2024 | Jul 2023 | Jul 2022 | Jul 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.34B | 1.20B | 980.50M | 905.34M | 812.61M | 743.27M |
| Gross Profit | 855.55M | 752.05M | 583.36M | 458.21M | 377.18M | 389.56M |
| EBITDA | 197.41M | 86.36M | 2.21M | -102.54M | -176.73M | -48.62M |
| Net Income | 189.36M | 69.80M | -6.10M | -111.86M | -180.43M | -66.51M |
Balance Sheet | ||||||
| Total Assets | 2.69B | 2.72B | 2.23B | 2.03B | 2.27B | 2.32B |
| Cash, Cash Equivalents and Short-Term Investments | 919.17M | 1.15B | 1.00B | 798.68M | 976.17M | 1.12B |
| Total Debt | 705.00M | 715.69M | 442.92M | 448.58M | 475.58M | 470.82M |
| Total Liabilities | 1.18B | 1.26B | 883.56M | 828.42M | 815.24M | 776.95M |
| Stockholders Equity | 1.51B | 1.46B | 1.34B | 1.20B | 1.45B | 1.54B |
Cash Flow | ||||||
| Free Cash Flow | 309.56M | 295.13M | 177.22M | 20.97M | -59.72M | 82.73M |
| Operating Cash Flow | 321.83M | 300.87M | 195.75M | 38.40M | -37.94M | 111.59M |
| Investing Cash Flow | -311.00M | -236.97M | -52.36M | 12.71M | 312.21M | 64.19M |
| Financing Cash Flow | -311.92M | 82.29M | 1.05M | -261.58M | -37.34M | -159.39M |
Guidewire Technical Analysis
Negative
146.08
Price Trends
145.46
Positive
171.65
Negative
201.21
Negative
Market Momentum
-0.94
Positive
43.97
Neutral
33.88
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 146.08 is below the 20-day moving average (MA) of 153.59, above the 50-day MA of 145.46, and below the 200-day MA of 201.21, indicating a neutral trend. The MACD of -0.94 indicates Positive momentum. The RSI at 43.97 is Neutral, neither overbought nor oversold. The STOCH value of 33.88 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 (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $9.21B | 34.08 | 15.65% | ― | 8.45% | -69.85% | |
72 Outperform | $12.37B | 49.66 | 12.92% | ― | 22.80% | 198.93% | |
71 Outperform | $14.34B | 61.99 | 8.73% | ― | 10.62% | 31.43% | |
71 Outperform | $6.74B | 19.61 | 26.06% | 0.94% | 9.72% | -2.69% | |
70 Outperform | $24.76B | 14.57 | 20.57% | ― | 3.85% | 72.42% | |
70 Outperform | $10.40B | 51.21 | 23.93% | 0.72% | 11.12% | -26.24% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
GWRE
Guidewire
146.08
-42.75
-22.64%
TYL
Tyler Technologies
333.70
-231.28
-40.94%
PAYC
Paycom
124.22
-92.52
-42.69%
DOCU
DocuSign
47.36
-31.23
-39.74%
ZM
Zoom Video Communications
84.02
12.19
16.97%
BSY
Bentley Systems
34.35
-7.54
-18.00%
Guidewire Corporate Events
Business Operations and StrategyStock BuybackFinancial Disclosures
Guidewire Authorizes New $500 Million Share Repurchase Program
Positive
Jan 8, 2026
On January 8, 2026, Guidewire Software, Inc. announced that it had completed the share repurchase program authorized in September 2022 and that its board of directors had immediately approved a new share repurchase program authorizing buybacks of ...
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.