Guidewire (GWRE) AI Stock Analysis

• Market Cap: $13.69B
• Dividend Yield: N/A
• Average Volume (3M): 1.96M
• Price to Earnings (P/E): 49.7
• Beta (1Y): 0.76
• Revenue Growth: 22.80%
• EPS Growth: 198.93%
• Country: US
• Employees: 3,507
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 1.17
• Shares Outstanding: 84,657,470
• 10 Day Avg. Volume: 2,175,035
• 30 Day Avg. Volume: 1,961,602
• 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: 1.03
• Enterprise Value/Revenue: 10.47
• Enterprise Value/Gross Profit: 16.42
• Enterprise Value/Ebitda: 71.16
• 1Y Price Target: $229.90
• Price Target Upside: 42.14% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 11
• EPS Forecast (FY): 3.49
• Revenue Forecast (FY): $1.45B

• Rating: 72 Outperform
• Price Target: $179.00 ▲(10.67% Upside)
• Action: Reiterated Date: 03/06/26
• Date: Action: Reiterated 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, retention and large RPO backlog

Sustained ARR growth, exceptional >99% retention and a 63% YoY RPO expansion create multi-year revenue visibility and predictable recurring cash flows. This durable contract footprint lowers churn risk, supports upsell/expansions, and underpins long-term revenue predictability.

Profitability inflection and strong free cash flow

Improving gross and operating margins plus free cash flow roughly matching net income signal higher earnings quality and internal funding capacity. Durable FCF supports investment in product, buybacks, and balance sheet optionality, enhancing resilience across business cycles.

Cloud, AI and product momentum with enterprise wins

Acceleration of cloud and AI-related product wins drives a higher subscription mix, deeper client integrations and competitive differentiation. Enterprise migrations and new product traction increase long-term stickiness and scalable recurring revenue potential.

Negative Factors

Low services gross margin

Services remain a low-margin portion of revenue, diluting blended gross margins and constraining operating leverage as the business scales. Persistent low services profitability can cap sustainable operating margin expansion and makes overall margins more sensitive to mix shifts.

Rising leverage reduces flexibility

Leverage has increased notably versus prior years, which modestly reduces financial flexibility for M&A or downturns. While coverage is manageable today given strong cash, a further rise in debt or stress on cash generation would tighten capital allocation choices.

Back-end weighted ARR recognition and longer sales cycles

Concentration of ARR recognition late in the fiscal year increases quarter-to-quarter volatility and forecasting uncertainty. Longer sales cycles for strategic offerings delay scale and postpone full-margin benefits, slowing durable revenue maturation from new product initiatives.

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

Profitability has inflected positively with expanding gross margin (~63%) and positive EBIT margin (~6.7%) in TTM, alongside strong free cash flow (~$310M) and solid earnings quality (FCF/net income ~0.97). Balance sheet is generally healthy but leverage has risen (debt-to-equity ~0.46 vs. ~0.33 in FY2024), and operating margin is still mid-single digits.

Income Statement

Results show a clear profitability inflection. Revenue rose to $1.34B in TTM (Trailing-Twelve-Months) from $1.20B in FY2025, while gross margin expanded to ~63% (vs. ~51% in FY2023). Operating profit turned positive (EBIT margin ~6.7% in TTM vs. negative in FY2022–FY2024) and net margin improved to ~7.2% in TTM. Offsetting this, recent revenue growth is modest versus earlier years, and margins—while improved—are still mid-single digits at the operating line, leaving less cushion if growth slows or costs re-accelerate.

Balance Sheet

Balance sheet looks generally sound with equity of ~$1.51B in TTM (Trailing-Twelve-Months) against total debt of ~$705M (debt-to-equity ~0.46), which is moderate for a software business. Profitability has improved enough to drive a positive return on equity (~6.5% in TTM), reversing prior negative returns. The main watch-out is leverage trending higher versus FY2024 (debt-to-equity ~0.33), implying a bit less balance-sheet flexibility than in earlier periods.

Cash Flow

Cash generation is a key strength. Operating cash flow reached ~$322M and free cash flow ~$310M in TTM (Trailing-Twelve-Months), up from ~$301M and ~$295M in FY2025, with positive free-cash-flow growth. Free cash flow closely matches reported earnings (free cash flow to net income ~0.97 in TTM), suggesting earnings quality is solid. The main weakness is that operating cash flow remains a relatively small share of revenue (coverage ratio ~0.76 in TTM, though improved vs. earlier years), indicating cash conversion could still be better for a mature software model.

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

• Technical Analysis Sentiment: Positive
• Last Price: 161.74
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• 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 161.74 is above the 20-day moving average (MA) of 146.41, above the 50-day MA of 152.01, and below the 200-day MA of 208.03, indicating a neutral trend. The MACD of 4.27 indicates Negative momentum. The RSI at 60.42 is Neutral, neither overbought nor oversold. The STOCH value of 55.51 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	74 Outperform	$9.38B	44.25	15.14%	―	8.45%	-69.85%
GWRE	72 Outperform	$13.69B	49.66	12.92%	―	22.80%	198.93%
TYL	71 Outperform	$14.99B	61.99	8.73%	―	10.62%	31.43%
PAYC	71 Outperform	$6.70B	19.61	26.06%	0.94%	9.72%	-2.69%
ZM	70 Outperform	$22.09B	14.57	20.57%	―	3.85%	72.42%
BSY	70 Outperform	$11.53B	51.21	23.93%	0.72%	11.12%	-26.24%
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.