Guidewire (GWRE) AI Stock Analysis

• Market Cap: $16.46B
• Dividend Yield: N/A
• Average Volume (3M): 901.62K
• Price to Earnings (P/E): 183.9
• Beta (1Y): 0.83
• 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: 1,550,801
• 30 Day Avg. Volume: 901,624
• 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: 1.21
• Enterprise Value/Revenue: 15.63
• Enterprise Value/Gross Profit: 24.76
• Enterprise Value/Ebitda: 181.04
• 1Y Price Target: $282.10
• Price Target Upside: 45.46% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 12
• EPS Forecast (FY): 2.96
• Revenue Forecast (FY): $1.41B

• Rating: 66 Neutral
• Price Target: $232.00 ▲(19.63% Upside)

Guidewire's overall stock score is driven by strong earnings call performance and solid financials, despite technical and valuation challenges. The company's strategic focus on cloud transformation and positive financial outlook are significant strengths. However, high valuation and mixed technical signals present risks.

Positive Factors

Cloud Adoption

The successful adoption of cloud solutions enhances scalability and recurring revenue, positioning Guidewire for sustained growth in the insurance sector.

Revenue Growth

Strong revenue growth indicates effective market penetration and product adoption, supporting long-term financial health and expansion opportunities.

AI Integration

Integrating AI capabilities can improve operational efficiency and product differentiation, providing a competitive edge in the insurance software market.

Negative Factors

Service Margin Challenges

Lower service margins could pressure profitability, affecting short-term financial performance and requiring careful management to maintain margins.

Operating Cash Flow

Negative operating cash flow may limit the company's ability to fund operations and investments, potentially impacting financial flexibility.

Low Return on Equity

A low return on equity suggests limited efficiency in generating returns from shareholder investments, which could affect investor confidence.

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: 193.93
• 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 193.93 is below the 20-day moving average (MA) of 207.36, below the 50-day MA of 223.51, and below the 200-day MA of 218.80, indicating a bearish trend. The MACD of -7.46 indicates Positive momentum. The RSI at 30.52 is Neutral, neither overbought nor oversold. The STOCH value of 11.26 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	$26.03B	17.24	17.74%	―	3.85%	72.42%
PAYC	76 Outperform	$9.16B	20.23	28.56%	0.90%	9.72%	-2.69%
DOCU	71 Outperform	$13.53B	47.44	15.22%	―	8.45%	-69.85%
BSY	71 Outperform	$12.25B	48.73	24.16%	0.70%	11.12%	-26.24%
TYL	66 Neutral	$19.37B	62.84	9.17%	―	10.62%	31.43%
GWRE	66 Neutral	$16.46B	183.91	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 Software’s Earnings Call Highlights Robust Growth

Guidewire Software Inc. recently held its earnings call, revealing a strong performance marked by significant growth in Annual Recurring Revenue (ARR) and increasing demand for its cloud platform. Despite these positive developments, the company acknowledged some challenges, particularly concerning potential declines in license revenue due to ongoing migrations.

Guidewire Software Reports Strong Fiscal Year 2025 Results

Guidewire Software Inc. is a leading provider of software products for property and casualty (P&C) insurers, offering a cloud-based platform that integrates data, analytics, and artificial intelligence to help insurers innovate and grow efficiently.