Guidewire Software, Inc. (GWRE)
OvervaluedFundamental
72
Price
$142.58
Market Cap
$12.38B
Part 1 · What the company is worth
Overview
Guidewire builds the software that property and casualty insurers use to run their core business: issuing policies, processing claims and billing customers. Insurers rent this software instead of maintaining their own aging systems built decades ago. Guidewire hosts it on its own cloud platform, handles the updates, and sells consulting and implementation services to help each insurer configure the system to its own products and rules.
How it makes money
Most revenue is subscription and support fees paid over the life of a multi-year cloud contract, which recur every year the insurer keeps using the system. A smaller, declining share is term licenses for insurers still running the older on-premise version. Services revenue comes from the lengthy, hands-on projects needed to configure and migrate an insurer's policies onto the platform, which can take a year or more per customer.
Revenue by segment
Recurring cloud-hosting and support fees paid by insurers running Guidewire's PolicyCenter, ClaimCenter and BillingCenter systems.
Term licenses sold mainly to insurers still running the older, self-hosted version of the software rather than the cloud platform.
Consulting and implementation work to configure and migrate an insurer's policies, claims and billing processes onto the platform.
Competitive moat
Switching costs · NarrowOnce an insurer has spent a year or more configuring its policies, rating rules and claims workflows inside Guidewire's system, ripping it out means redoing that work on a competing platform while keeping the business running. That friction, more than the software itself, is what keeps existing customers renewing rather than switching to a rival core-systems vendor.
What drives demand
Moderately cyclicalInsurers buy Guidewire's systems as multi-year technology investments funded from their own IT budgets, which they can defer or accelerate depending on their profitability and how urgently they need to replace aging systems. Demand is not driven by end-consumer spending, so it is less exposed to a typical recession, but a large contract's timing can still slip if an insurer's own results are under pressure.
Key risks
- Reliance on a small number of large customers — The company discloses that a relatively small number of large insurance customers generate a meaningful share of revenue, giving those customers substantial negotiating leverage on price and terms.
- Cloud market may not evolve as expected — Guidewire's strategy depends on insurers continuing to adopt cloud-based core systems; if that shift slows due to cost, security or reliability concerns, renewal rates and new sales could suffer.
- Long and unpredictable sales and implementation cycles — Selling to large insurers and then implementing the software involves lengthy, variable cycles that can take many months or years, making individual deals and their timing hard to predict.
- Competition from other core-systems and cloud vendors — The market for insurance core systems is competitive and changing quickly as customer preferences shift toward cloud deployment, and rivals or new entrants could erode Guidewire's position.
Customer concentration
Top customers account for 22% of revenue
In fiscal 2024 Guidewire's ten largest customers together accounted for about 22% of total revenue, giving those large insurers meaningful leverage to negotiate price and contract terms at renewal time.
The case for
Buyers argue that the shift of large insurers onto Guidewire's cloud platform is still in its early stages, that the switching costs built into a fully configured core system make renewals highly likely, and that subscription revenue growing faster than the rest of the business signals durable, compounding demand.
The case against
Sellers worry that a small number of very large customers hold real negotiating power over price, that long implementation projects make growth lumpy and hard to predict, and that newer, AI-native software vendors could eventually challenge Guidewire's position in a market it does not yet fully dominate.
Written by the editors, published on August 18, 2026
Direct competitors
Who this company fights with for the same customers
Generated on September 18, 2026 with claude-haiku-4-5 — shared with all users
Named first among Guidewire's competitors in its 10-K, Duck Creek sells the same cloud policy, billing and claims core suite to the same North American property and casualty insurers.
Sapiens competes for the same core-system replacement contracts, with particular strength among European and Asia-Pacific insurers that also want life and annuity lines on one vendor; it was taken private by Advent International and delisted from Nasdaq in December 2025.
Majesco offers cloud policy, billing and claims platforms aimed at the small and mid-sized carriers Guidewire pursues below its Tier-1 accounts.
Insurity sells competing core and analytics software to North American property and casualty carriers and managing general agents, overlapping directly with Guidewire's product footprint.
EIS pitches an API-first insurance core platform to the same insurers weighing a move off legacy systems, competing deal by deal on the same policy and claims workloads.
Named by Guidewire in its 10-K, Origami Risk sells cloud policy, billing and claims administration to insurers, pools and self-insured programs, competing for the same claims and underwriting budgets.
Balance Sheet & Liquidity
Revenue
$1.48B
Trailing 12 months (through 7/31/2026)
Net Income
$139M
Trailing 12 months (through 7/31/2026)
Free Cash Flow
$378M
Total Equity
$1.19B
Total Liabilities
$1.38B
Current Ratio
1.79
Interest Coverage
11.25
Debt/EBITDA
4.02
Earnings Per Share
Revenue & Net Income
Free Cash Flow
Income Breakdown
Historical statement
Margins over time
Debt over time
How heavy the debt is
Growth grid
Growth — Revenue
Fair Value Estimation
Fair Value
$110.10
Current Price
$142.58
Margin of Safety
-29.5%
Fair Value Range
$71.57 - $148.64
Spread across the valuation methods used, not a statistically calibrated confidence interval.
Estimation Methods
Valuation Metrics
P/E Ratio
87.47
ROE
11.7%
P/B Ratio
9.79
P/FCF
30.96
Gross Margin
64.2%
ROIC
6.2%
Profitability Radar
Value Creation (Economic Moat)
ROIC
6.2%
WACC
9.6%
ROIC − WACC
-3.4 pp
ROIC is below the cost of capital — the company is destroying value for every dollar invested.
Fundamental Analysis Criteria
Passed (21)
- EPS shows upward trend
- EPS CAGR 11.16%
- Price CAGR 11.98%
- ROIC 6.2%
- Gross Margin 64.2%
- Debt/Equity ratio
- Operating Margin 10.2%
- Positive Free Cash Flow
- CapEx intensity
- Current Ratio
- Interest Coverage
- Debt/EBITDA
- Return on Tangible Assets
- ROE 10.0%
- Revenue Growth 5Y 14.7%
- Analyst Consensus 86% Buy
- Earnings Surprise avg 16.2%
- Earnings Quality (OCF/NI) 2.80
- Share Dilution -0.8%
- Net Margin Trend 9.4% vs 5.8%
- Piotroski F-Score 7/9
Failed (5)
- P/FCF 30.96
- P/B Ratio 9.79
- Low reliance on intangibles
- Price below Graham Number
- DCF valuation (Overvalued)
Unavailable (2)
- Dividend Payout NaN%
- PEG Ratio (need PE > 0 and growth > 0)
Piotroski F-Score
Strong financial health
Earnings Quality
High quality: earnings backed by cash
Share Dilution
Buying back shares. Shareholder friendly
Institutional Holdings
Governance
Executive Team
| Name | Title | Age |
|---|---|---|
| Mr. Michael George Rosenbaum | CEO & Director | 53 |
| Mr. John Mullen | President | 52 |
| Mr. Jeffrey Elliott Cooper | Chief Financial Officer | 49 |
| Mr. David F. Peterson | Senior VP, Principal Accounting Officer & Chief Accounting Officer | 64 |
| Mr. James Winston King J.D. | Chief Administrative Officer, General Counsel & Secretary | 53 |
| Mr. Chet Mandair | Chief Information Officer | - |
| Mr. Garo Toomajanian | Investor Relations | - |
| Mr. Brian Desmond | Chief Marketing Officer | - |
| Ms. Brigette McInnis-Day | Chief People Officer | - |
| Mr. Steven Sherry | Senior Vice President of Strategic Accounts | 68 |
Audit Risk
1
Board Risk
3
Compensation Risk
4
Shareholder Rights Risk
2
Part 2 · The price and when to enter
This part won't tell you whether the company is worth owning: it helps you choose when to buy it, once the fundamentals have convinced you. Inside: technical analysis, potential, historical drawdowns, gamma exposure.
Documents
- View document
Annual Report (10-K)
A yearly overview of the business, its financial results, and the risks it faces.
Filed on 2026-09-11
- View document
Quarterly Report (10-Q)
A snapshot of financial performance for the most recent three-month period.
Filed on 2026-06-05
- View document
Current Report (8-K)
An announcement of a major event, such as a leadership change or big news.
Filed on 2026-09-30
via SEC EDGAR
Income History
via SEC EDGAR
Latest News
Recent headlines for GWRE, sourced from Markets Gazette.
- 6/4/2026NEGATIVEGuidewire Software Posts Better-Than-Expected Q3 Report, But Stock Drops
Guidewire Software reported Q3 results that surpassed analyst expectations, yet the company's stock experienced a decline. While specific figures were not detailed in the provided snippet, the market's reaction suggests that forward-looking guidance or other qualitative factors may have disappointed investors. This divergence between reported earnings and stock performance highlights the importance of future outlook and market sentiment in stock valuation, potentially signaling underlying concerns about future growth or competitive pressures despite current operational successes.
- 3/6/2026POSITIVEThese Analysts Revise Their Forecasts On Guidewire Software Following Q2 Results
Guidewire Software (GWRE) announced robust Q2 financial results, surpassing both revenue and earnings per share (EPS) expectations. The company further bolstered investor sentiment by elevating its fiscal year 2026 financial projections. This positive performance spurred a notable 4.7% surge in its stock price. While analyst sentiment shows some divergence, with price target adjustments in both directions, the company's strong operational execution and optimistic forward guidance suggest underlying strength. Investors should monitor the sustainability of this growth trajectory and the market's reaction to the mixed analyst outlook.
- 3/6/2026NEUTRALGuidewire (GWRE) Q2 2026 Earnings Call Transcript
The Q2 2026 earnings call transcript for Guidewire Software Inc. (GWRE) has been released. While the specific content is not available, the release of such transcripts is standard practice for publicly traded companies. Investors typically analyze these documents for details on financial performance, future outlook, business strategies, and management's responses to analyst questions. The availability of the transcript allows for in-depth analysis, but without specific content details, the stock's impact remains neutral pending further information.
via Markets Gazette