Guidewire (GWRE) AI Stock Analysis

• Market Cap: $18.31B
• Dividend Yield: N/A
• Average Volume (3M): 589.54K
• Price to Earnings (P/E): 556.8
• Beta (1Y): 0.89
• Revenue Growth: 18.61%
• EPS Growth: N/A
• Country: US
• Employees: 3,507
• Sector: Technology
• Sector Strength: 84
• Industry: Software - Application
• EPS (TTM): 0.84
• Shares Outstanding: 84,195,220
• 10 Day Avg. Volume: 576,060
• 30 Day Avg. Volume: 589,543
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.95
• Enterprise Value/Revenue: 15.27
• Enterprise Value/Gross Profit: 24.58
• Enterprise Value/Ebitda: 279.25
• 1Y Price Target: $271.14
• Price Target Upside: 24.96% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8

• Rating: 69 Neutral
• Price Target: $239.00 ▲(10.14% Upside)

Guidewire's strong financial performance and positive earnings call sentiment are significant strengths, contributing to a solid stock score. However, the high P/E ratio raises valuation concerns, and technical indicators suggest neutral momentum. The dependency on Q4 performance and potential challenges in the Japanese market are risks to monitor.

Positive Factors

Cloud Migration

The accelerating cadence of cloud migrations is leading to greater deal frequency and increasing deal sizes.

Financial Performance

Guidewire posted one of its strongest quarterly beats, which is impressive in the macro environment.

Market Position

Guidewire is a dominant player in a market with high barriers to entry and has almost no churn, given how deeply entrenched it is within insurers' mission-critical systems.

Negative Factors

Competitive Stance

Despite strong execution, the analyst reiterates an Underperform rating, believing risk/reward is more attractive in other software stocks.

Stock Price Expectation

Expected share price return is projected to be -8.8%, indicating a potential decline in stock value.

Valuation Concerns

Following the strong 40% YTD rally in GWRE shares, many investors push back on GWRE valuation as the stock currently trades on 13x 2026E EV/Sales, making it among the more expensive names in SaaS universe.

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 Guidewire InsuranceNow, a cloud-based platform that offers policy, billing, and claims management functionality to insurers; and Guidewire InsuranceSuite for Self-Managed. In addition, the company offers Guidewire Rating Management to manage the pricing of insurance products; Guidewire Reinsurance Management to use rules-based logic to execute reinsurance strategy through underwriting and claims processes; Guidewire Client Data Management to capitalize on customer information; and Guidewire Product Content Management that offers software tools and standards-based line-of-business templates to introduce and modify products. Further, it provides Guidewire Underwriting Management, a cloud-based integrated business application; Guidewire AppReader, a submission intake management solution; Guidewire ClaimCenter Package for the London market supports the claims workflow used by London Market insurers and brokers; Guidewire Digital Engagement Applications, which enable insurers to provide digital experiences to customers, agents, vendors, and field personnel through their device of choice; and Guidewire for Salesforce to provide customer information regarding policies and claims. Additionally, the company offers Guidewire Predictive Analytics, a set of cloud-native applications; Guidewire Risk Insights that allows insurers to assess new and evolving risks; Guidewire Business Intelligence that allows insurers to measure business performance; Guidewire DataHub, an operational data store; and Guidewire InfoCenter, a business intelligence warehouse, as well as implementation and integration, and professional services. The company was founded in 2001 and is headquartered in San Mateo, California.

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 demonstrates a strong financial position with consistent revenue growth and improving profitability. The balance sheet reflects stability with prudent leverage, while cash flow metrics show efficient cash utilization and growth. Areas for improvement include enhancing net profit margins and return on equity to further strengthen financial performance.

Income Statement

Guidewire shows strong revenue growth with a TTM increase of 16.01% compared to the previous annual period. The gross profit margin improved to 62.12% TTM, demonstrating operational efficiency. Positive net income TTM indicates a turnaround from past losses, although the net profit margin is relatively modest at 3.04%. EBIT and EBITDA margins have notably improved, indicating better cost management.

Balance Sheet

The company maintains a solid equity base with an equity ratio of 54.76% TTM, showing strong balance sheet stability. The debt-to-equity ratio is moderate at 0.52 TTM, indicating manageable leverage. Return on equity is modest at 2.54% TTM, reflecting room for improvement in profitability.

Cash Flow

Free cash flow grew by 34.73% TTM, reflecting strong cash generation. The operating cash flow to net income ratio of 7.22 TTM indicates excellent cash conversion from earnings, and the free cash flow to net income ratio is robust at 6.90 TTM, highlighting effective cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.14B	980.50M	905.34M	812.61M	743.27M	742.31M
Gross Profit	706.68M	583.36M	458.21M	377.18M	389.56M	404.29M
EBITDA	62.21M	2.21M	-102.54M	-176.73M	-48.62M	36.26M
Net Income	34.61M	-6.10M	-111.86M	-180.43M	-66.51M	-27.20M
Balance Sheet
Total Assets	2.49B	2.23B	2.03B	2.27B	2.32B	2.36B
Cash, Cash Equivalents and Short-Term Investments	920.44M	1.00B	798.68M	976.17M	1.12B	1.13B
Total Debt	706.71M	442.92M	448.58M	475.58M	470.82M	460.55M
Total Liabilities	1.13B	883.56M	828.42M	815.24M	776.95M	708.08M
Stockholders Equity	1.36B	1.34B	1.20B	1.45B	1.54B	1.66B
Cash Flow
Free Cash Flow	238.81M	177.22M	20.97M	-59.72M	82.73M	87.41M
Operating Cash Flow	249.81M	195.75M	38.40M	-37.94M	111.59M	113.07M
Investing Cash Flow	-185.87M	-52.36M	12.71M	312.21M	64.19M	-5.80M
Financing Cash Flow	82.61M	1.05M	-261.58M	-37.34M	-159.39M	4.96M

Guidewire Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 216.99
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 216.99 is above the 20-day moving average (MA) of 213.90, below the 50-day MA of 221.48, and above the 200-day MA of 205.31, indicating a neutral trend. The MACD of -1.03 indicates Negative momentum. The RSI at 49.26 is Neutral, neither overbought nor oversold. The STOCH value of 70.66 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GWRE.

Guidewire Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DOCU	79 Outperform	$14.97B	14.34	70.20%	―	7.85%	935.80%
PAYC	78 Outperform	$12.73B	29.76	25.76%	0.68%	10.21%	-10.56%
ZM	76 Outperform	$24.37B	21.58	13.60%	―	3.63%	36.57%
TYL	71 Outperform	$23.90B	79.20	9.07%	―	10.69%	45.43%
GWRE	69 Neutral	$18.31B	556.75	2.61%	―	18.61%	―
BSY	69 Neutral	$16.90B	69.38	23.69%	0.48%	10.45%	-32.43%
Sector *	61 Neutral	$35.51B	8.11	-10.49%	1.89%	8.55%	-8.72%

Guidewire Corporate Events

Guidewire Appoints David Peterson as Accounting Officer

On July 24, 2025, Guidewire Software, Inc. appointed David Peterson as the principal accounting officer. Peterson, who has been with the company since 2018, previously served as Chief Accounting Officer. His appointment does not involve any new compensation arrangements, and he will continue under his current terms, including an annual base salary of $310,000 and eligibility for a bonus. This appointment solidifies Guidewire’s leadership team without altering existing compensation structures, indicating stability in its financial management.