Guidewire (GWRE) AI Stock Analysis

• Market Cap: $15.98B
• Dividend Yield: N/A
• Average Volume (3M): 1.03M
• Price to Earnings (P/E): 178.0
• Beta (1Y): 0.86
• Revenue Growth: 22.80%
• EPS Growth: 198.93%
• Country: US
• Employees: 3,507
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.66
• Shares Outstanding: 85,019,170
• 10 Day Avg. Volume: 720,194
• 30 Day Avg. Volume: 1,025,630
• PEG Ratio: -0.22
• Price to Book (P/B): 13.02
• Price to Sales (P/S): 15.77
• P/FCF Ratio: 64.27
• Enterprise Value/Market Cap: 1.25
• Enterprise Value/Revenue: 15.74
• Enterprise Value/Gross Profit: 24.93
• Enterprise Value/Ebitda: 182.23
• 1Y Price Target: $279.60
• Price Target Upside: 48.98% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 12
• EPS Forecast (FY): 2.96
• Revenue Forecast (FY): $1.41B

• Rating: 63 Neutral
• Price Target: $200.00 ▲(6.56% Upside)

The score is supported most by strong earnings-call momentum and raised outlook, alongside generally improving profitability and a stable balance sheet. These positives are partially offset by weak technicals (price below major moving averages with bearish momentum) and a demanding valuation (very high P/E), which increase downside risk if growth or margins disappoint.

Positive Factors

Recurring revenue and ARR growth

Sustained 22% ARR growth and a 31% rise in subscription/support revenue indicate an expanding recurring-revenue base. This improves revenue visibility, steadies cash flows, and supports long-term investment in product and cloud operations, strengthening predictable growth.

Successful cloud adoption and new deals

Ongoing cloud wins and multi-region deal flow accelerate conversion to higher-margin, recurring cloud subscriptions. Cloud adoption raises customer switching costs, deepens integrations, and scales revenue per account over time, reinforcing Guidewire's competitive position in P&C software.

Strong liquidity supporting strategy

A large cash cushion (~$1.41B) and a new $500M buyback authorization signal robust liquidity. This provides flexibility to fund strategic investments, absorb execution risk during cloud transition, and return capital without jeopardizing operating commitments or M&A optionality.

Negative Factors

Negative operating cash flow in quarter

A negative quarterly operating cash flow driven by compensation timing highlights cash conversion sensitivity to payroll and commissions. If such cash outflows recur or scale with headcount, they can pressure free cash flow and constrain reinvestment or capital return over multiple quarters.

Service margin pressure from investments

Planned capacity and AI investments will depress service margins, reducing near-term profitability on professional services. If efficiency gains or higher-margin cloud revenue don't offset these costs, sustained margin pressure could limit operating leverage and long-term cash generation.

Modest EBIT margin and operating efficiency

A low EBIT margin versus strong gross margins suggests limited operating leverage and higher operating costs. Without sustained efficiency improvements, this constrains the company's ability to convert revenue growth into durable operating profits and free cash flow over the medium term.

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 primarily generates revenue through the sale of software licenses, subscription fees for its cloud services, and professional services such as consulting and implementation support. The company offers a mix of on-premises and cloud-based solutions, with an increasing emphasis on its cloud products, which provide recurring revenue through subscription models. Key revenue streams include license fees from new customers, renewals from existing clients, and ongoing support services. Additionally, Guidewire benefits from strategic partnerships with various technology companies and system integrators, which can enhance its market reach and facilitate the adoption of its solutions across the insurance sector.

Guidewire Financial Statement Overview

Summary

Guidewire demonstrates a positive financial trajectory with strong revenue growth and improved profitability. The balance sheet is stable, supported by moderate leverage and a solid equity base. While cash flow generation shows some decline, the company maintains effective cash management. Continued focus on operational efficiency and cash flow generation will be key to sustaining its growth momentum.

Income Statement

Guidewire's income statement shows a positive trajectory with a consistent revenue growth rate of 5.8% in the TTM (Trailing-Twelve-Months) period. The gross profit margin has improved to 63.1%, indicating efficient cost management. The net profit margin has also increased to 7.2%, reflecting enhanced profitability. However, the EBIT margin remains modest at 4.5%, suggesting room for operational efficiency improvements.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.46, indicating moderate leverage. The return on equity (ROE) has improved to 5.2%, showing better utilization of equity. The equity ratio stands at 58.1%, highlighting a solid equity base. Despite these strengths, the company should monitor its debt levels to maintain financial flexibility.

Cash Flow

Cash flow analysis reveals a slight decline in free cash flow growth, down by 1.7% in the TTM period. The operating cash flow to net income ratio is 0.76, indicating a healthy conversion of earnings into cash. The free cash flow to net income ratio is strong at 96.7%, suggesting effective cash management. Continued focus on cash flow generation will be crucial for sustaining growth.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.20B	980.50M	905.34M	812.61M	743.27M
Gross Profit	752.05M	583.36M	458.21M	377.18M	389.56M
EBITDA	86.36M	2.21M	-102.54M	-176.73M	-48.62M
Net Income	69.80M	-6.10M	-111.86M	-180.43M	-66.51M
Balance Sheet
Total Assets	2.72B	2.23B	2.03B	2.27B	2.32B
Cash, Cash Equivalents and Short-Term Investments	1.15B	1.00B	798.68M	976.17M	1.12B
Total Debt	715.69M	442.92M	448.58M	475.58M	470.82M
Total Liabilities	1.26B	883.56M	828.42M	815.24M	776.95M
Stockholders Equity	1.46B	1.34B	1.20B	1.45B	1.54B
Cash Flow
Free Cash Flow	295.13M	177.22M	20.97M	-59.72M	82.73M
Operating Cash Flow	300.87M	195.75M	38.40M	-37.94M	111.59M
Investing Cash Flow	-236.97M	-52.36M	12.71M	312.21M	64.19M
Financing Cash Flow	82.29M	1.05M	-261.58M	-37.34M	-159.39M

Guidewire Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 187.68
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 187.68 is below the 20-day moving average (MA) of 198.40, below the 50-day MA of 211.53, and below the 200-day MA of 219.69, indicating a bearish trend. The MACD of -5.97 indicates Positive momentum. The RSI at 31.73 is Neutral, neither overbought nor oversold. The STOCH value of 11.46 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GWRE.

Guidewire Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ZM	81 Outperform	$25.39B	16.83	17.74%	―	3.85%	72.42%
PAYC	76 Outperform	$8.81B	19.46	28.56%	0.94%	9.72%	-2.69%
DOCU	71 Outperform	$13.06B	48.69	15.22%	―	8.45%	-69.85%
BSY	71 Outperform	$11.97B	47.61	24.16%	0.72%	11.12%	-26.24%
TYL	66 Neutral	$19.09B	62.41	9.17%	―	10.62%	31.43%
GWRE	63 Neutral	$15.98B	177.98	6.57%	―	22.80%	198.93%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Guidewire Corporate Events

Guidewire Authorizes New $500 Million Share Repurchase Program

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 up to $500 million of its common stock. The company said repurchases under the new authorization may be executed in the open market, through privately negotiated transactions or other methods, at management’s discretion and subject to market conditions, and may be modified, suspended, or terminated by the board at any time. Guidewire expects to fund the repurchases with existing cash and cash equivalents, working capital, or operating cash flow; as of October 31, 2025, it held $1.4093 billion in cash, cash equivalents, and investments and had fully utilized the remaining $138.2 million under the prior repurchase authorization, underscoring a continued commitment to returning capital to shareholders while maintaining a substantial liquidity cushion.

The most recent analyst rating on (GWRE) stock is a Buy with a $250.00 price target. To see the full list of analyst forecasts on Guidewire stock, see the GWRE Stock Forecast page.

Guidewire Shareholders Back Directors, Executive Pay and Auditor

At its annual meeting of stockholders held on December 15, 2025, Guidewire Software’s shareholders elected eight directors to one-year terms ending at the 2026 annual meeting, with each nominee receiving strong majority support. Investors also ratified the appointment of KPMG LLP as the independent registered public accounting firm for the fiscal year ending July 31, 2026, and approved on an advisory basis the compensation of the company’s named executive officers, signaling continued shareholder backing for the current leadership, governance practices, and financial oversight.

The most recent analyst rating on (GWRE) stock is a Buy with a $250.00 price target. To see the full list of analyst forecasts on Guidewire stock, see the GWRE Stock Forecast page.