tiprankstipranks
Trending News
More News >
Guidewire Software Inc. (GWRE)
:GWRE
Advertisement

Guidewire (GWRE) AI Stock Analysis

Compare
657 Followers

Top Page

GWRE

Guidewire

(NYSE:GWRE)

Select Model
Select Model
Select Model
Neutral 68 (OpenAI - 4o)
Rating:68Neutral
Price Target:
$284.00
▲(21.09% Upside)
Guidewire's overall stock score is driven by its solid financial performance and strong earnings call results, highlighting significant growth in ARR and cloud demand. However, the high P/E ratio suggests overvaluation, and technical indicators point to potential short-term volatility.
Positive Factors
Cloud Transformation
Guidewire's shift to cloud services is accelerating, enhancing scalability and recurring revenue, crucial for long-term growth.
Strategic Partnerships
Long-term partnerships with major insurers like Liberty Mutual strengthen market position and ensure steady revenue streams.
Revenue Growth
Significant revenue growth, especially in subscriptions, indicates strong demand and successful product offerings, supporting future expansion.
Negative Factors
Decline in License Revenue
A decline in license revenue due to cloud migrations could impact short-term cash flow and require strategic adjustments.
Profit Margin Challenges
Low net profit margins indicate potential inefficiencies or high costs, which could hinder profitability if not addressed.
Support Revenue Decline
The decline in support revenue highlights challenges in transitioning existing customers to new platforms, affecting short-term revenue.

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

Guidewire Business Overview & Revenue Model

Company DescriptionGuidewire 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 MoneyGuidewire 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 Earnings Call Summary

Earnings Call Date:Sep 04, 2025
(Q4-2025)
|
% Change Since: |
Next Earnings Date:Dec 04, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong overall performance with significant growth in ARR and cloud demand, highlighted by strategic wins and improved margins. However, challenges such as potential declines in license revenue due to migrations were noted.
Q4-2025 Updates
Positive Updates
Record-Breaking ARR and Revenue Growth
ARR in fiscal 2025 grew 19%, and fully ramped ARR grew 22% on a constant currency basis. The company surpassed the $1 billion ARR milestone.
Strong Cloud Platform Demand and Strategic Wins
Q4 was a record quarter driven by deal volume and size, including a strategic 10-year partnership with Liberty Mutual for migrating to the Guidewire Cloud Platform.
Improving Cloud Margins
Subscription and support gross margins finished the year at 70%, ahead of schedule, indicating efficient scaling of the Guidewire Cloud Platform.
Significant Global Expansion
Guidewire signed 57 core cloud deals in fiscal 2025. Notable geographic performance includes 11 deals in Europe and increased market momentum in Latin America.
Data and Analytics Growth
Significant traction with Industry Intelligence offerings, closing multiple deals in Q4, reflecting healthy growth in data and analytics products.
Negative Updates
Potential Decline in License Revenue
License revenue is expected to decline by over $30 million in fiscal 2026, attributed to continued cloud migrations.
Challenges in Sustaining Subscription Growth
The company expects a $7 million decline in support revenue as a result of on-prem customers migrating to the cloud.
Company Guidance
In the Guidewire Software fourth quarter of fiscal 2025 financial results conference call, key guidance metrics highlighted the company's strong performance and future potential. The company achieved 19% growth in Annual Recurring Revenue (ARR), surpassing the $1 billion ARR milestone, with fully ramped ARR growing 22% on a constant currency basis. Guidewire's cloud transformation has accelerated, with total cloud ARR growing 36% year-over-year and comprising 74% of the total ARR. Revenue for the year reached $1.2 billion, driven by a 40% increase in subscription revenue to $667 million. The company also reported a 66% overall gross margin, with subscription and support gross margins finishing the year at 70%. Looking ahead, Guidewire projects ARR between $1.21 and $1.22 billion for fiscal 2026, representing 17% growth at the midpoint. They also expect total revenue to be between $1.385 and $1.405 billion, with subscription revenue anticipated to grow by 34% to approximately $888 million. Operating cash flow for fiscal 2026 is projected to be between $350 million and $370 million.

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
75
Positive
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
70
Positive
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
80
Positive
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.
BreakdownTTMDec 2025Dec 2024Dec 2023Dec 2022Dec 2021
Income Statement
Total Revenue1.20B1.20B980.50M905.34M812.61M743.27M
Gross Profit752.05M752.05M583.36M458.21M377.18M389.56M
EBITDA86.36M86.36M2.21M-102.54M-176.73M-48.62M
Net Income69.80M69.80M-6.10M-111.86M-180.43M-66.51M
Balance Sheet
Total Assets2.72B2.72B2.23B2.03B2.27B2.32B
Cash, Cash Equivalents and Short-Term Investments1.15B1.15B1.00B798.68M976.17M1.12B
Total Debt705.25M705.25M442.92M448.58M475.58M470.82M
Total Liabilities1.26B1.26B883.56M828.42M815.24M776.95M
Stockholders Equity1.46B1.46B1.34B1.20B1.45B1.54B
Cash Flow
Free Cash Flow290.89M295.13M177.22M20.97M-59.72M82.73M
Operating Cash Flow300.87M300.87M195.75M38.40M-37.94M111.59M
Investing Cash Flow-236.97M-236.97M-52.36M12.71M312.21M64.19M
Financing Cash Flow82.29M82.29M1.05M-261.58M-37.34M-159.39M

Guidewire Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price234.54
Price Trends
50DMA
227.41
Positive
100DMA
227.72
Positive
200DMA
208.93
Positive
Market Momentum
MACD
4.39
Positive
RSI
47.21
Neutral
STOCH
7.76
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 234.54 is below the 20-day moving average (MA) of 241.04, above the 50-day MA of 227.41, and above the 200-day MA of 208.93, indicating a neutral trend. The MACD of 4.39 indicates Positive momentum. The RSI at 47.21 is Neutral, neither overbought nor oversold. The STOCH value of 7.76 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.
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

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
24.84B22.1213.27%3.63%36.57%
77
Outperform
12.58B29.4131.85%0.70%10.21%-10.56%
77
Outperform
16.89B61.3414.13%8.29%-71.36%
71
Outperform
22.62B74.688.44%10.69%45.43%
68
Neutral
$20.01B293.654.99%22.64%
65
Neutral
15.87B66.8021.88%0.52%10.45%-32.43%
61
Neutral
$37.18B12.37-10.20%1.83%8.50%-7.62%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GWRE
Guidewire
230.39
52.42
29.45%
TYL
Tyler Technologies
529.72
-47.80
-8.28%
PAYC
Paycom
217.51
50.79
30.46%
DOCU
DocuSign
81.52
19.85
32.19%
ZM
Zoom Video Communications
84.51
14.96
21.51%
BSY
Bentley Systems
52.35
1.80
3.56%

Guidewire Corporate Events

Executive/Board Changes
Guidewire Appoints David Peterson as Accounting Officer
Neutral
Jul 29, 2025

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.

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: Sep 06, 2025