Overall GWRE gets a fundamental rating of 5 out of 10. We evaluated GWRE against 277 industry peers in the Software industry. GWRE has an excellent financial health rating, but there are some minor concerns on its profitability. GWRE is valued quite expensively, but it does show have an excellent growth rating.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year GWRE was profitable.
In the past year GWRE had a positive cash flow from operations.
GWRE had negative earnings in 4 of the past 5 years.
Of the past 5 years GWRE 4 years had a positive operating cash flow.

1.2 Ratios

With a decent Return On Assets value of 3.48%, GWRE is doing good in the industry, outperforming 67.51% of the companies in the same industry.
The Return On Equity of GWRE (6.00%) is better than 69.68% of its industry peers.
Looking at the Return On Invested Capital, with a value of 2.26%, GWRE is in the better half of the industry, outperforming 67.15% of the companies in the same industry.

		Industry Rank	Sector Rank
ROA	3.48%
ROE	6%
ROIC	2.26%

ROA(3y)-1.07%

ROA(5y)-2.81%

ROE(3y)-1.66%

ROE(5y)-4.34%

ROIC(3y)N/A

ROIC(5y)N/A

1.3 Margins

With a decent Profit Margin value of 7.23%, GWRE is doing good in the industry, outperforming 67.51% of the companies in the same industry.
The Operating Margin of GWRE (5.05%) is better than 68.23% of its industry peers.
GWRE's Gross Margin of 63.13% is in line compared to the rest of the industry. GWRE outperforms 40.79% of its industry peers.
In the last couple of years the Gross Margin of GWRE has grown nicely.

		Industry Rank	Sector Rank
OM	5.05%
PM (TTM)	7.23%
GM	63.13%

OM growth 3YN/A

OM growth 5YN/A

PM growth 3YN/A

PM growth 5YN/A

GM growth 3Y10.45%

GM growth 5Y2.8%

More info and screens

ROA

ROE

ROIC

Operating and Profit Margin

Show most profitable peers

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), GWRE is destroying value.
GWRE has more shares outstanding than it did 1 year ago.
The number of shares outstanding for GWRE has been increased compared to 5 years ago.
The debt/assets ratio for GWRE is higher compared to a year ago.

2.2 Solvency

GWRE has an Altman-Z score of 7.96. This indicates that GWRE is financially healthy and has little risk of bankruptcy at the moment.
GWRE has a Altman-Z score of 7.96. This is amongst the best in the industry. GWRE outperforms 84.48% of its industry peers.
GWRE has a debt to FCF ratio of 2.50. This is a good value and a sign of high solvency as GWRE would need 2.50 years to pay back of all of its debts.
GWRE's Debt to FCF ratio of 2.50 is fine compared to the rest of the industry. GWRE outperforms 65.70% of its industry peers.
A Debt/Equity ratio of 0.44 indicates that GWRE is not too dependend on debt financing.
GWRE has a Debt to Equity ratio of 0.44. This is in the lower half of the industry: GWRE underperforms 63.54% of its industry peers.
Although GWRE does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.

		Industry Rank	Sector Rank
Debt/Equity	0.44
Debt/FCF	2.5
Altman-Z	7.96

ROIC/WACC0.21

WACC10.97%

2.3 Liquidity

A Current Ratio of 3.48 indicates that GWRE has no problem at all paying its short term obligations.
GWRE's Current ratio of 3.48 is fine compared to the rest of the industry. GWRE outperforms 77.62% of its industry peers.
A Quick Ratio of 3.48 indicates that GWRE has no problem at all paying its short term obligations.
GWRE has a Quick ratio of 3.48. This is in the better half of the industry: GWRE outperforms 77.62% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	3.48
Quick Ratio	3.48

More info and screens

WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

Show peers with great health

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 63.28% over the past year.
The Earnings Per Share has been growing by 16.12% on average over the past years. This is quite good.
The Revenue has grown by 22.80% in the past year. This is a very strong growth!
GWRE shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 10.13% yearly.

EPS 1Y (TTM)63.28%

EPS 3YN/A

EPS 5Y16.12%

EPS Q2Q%53.49%

Revenue 1Y (TTM)22.8%

Revenue growth 3Y13.95%

Revenue growth 5Y10.13%

Sales Q2Q%26.53%

3.2 Future

The Earnings Per Share is expected to grow by 21.41% on average over the next years. This is a very strong growth
Based on estimates for the next years, GWRE will show a quite strong growth in Revenue. The Revenue will grow by 15.55% on average per year.

EPS Next Y13.23%

EPS Next 2Y21.69%

EPS Next 3Y21.51%

EPS Next 5Y21.41%

Revenue Next Year19.45%

Revenue Next 2Y17.44%

Revenue Next 3Y16.5%

Revenue Next 5Y15.55%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

More info and screens

Find the best growth stocks

Show best growing peers

4. Valuation

4.1 Price/Earnings Ratio

GWRE is valuated quite expensively with a Price/Earnings ratio of 55.37.
The rest of the industry has a similar Price/Earnings ratio as GWRE.
GWRE is valuated expensively when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 40.62, which means the current valuation is very expensive for GWRE.
Compared to the rest of the industry, the Price/Forward Earnings ratio of GWRE is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of GWRE to the average of the S&P500 Index (24.26), we can say GWRE is valued expensively.

		Industry Rank	Sector Rank
PE	55.37
Fwd PE	40.62

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of GWRE is on the same level as its industry peers.
The rest of the industry has a similar Price/Free Cash Flow ratio as GWRE.

		Industry Rank	Sector Rank
P/FCF	50.31
EV/EBITDA	140.94

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
A more expensive valuation may be justified as GWRE's earnings are expected to grow with 21.51% in the coming years.