GUIDEWIRE SOFTWARE INC (GWRE) Stock Fundamental Analysis
NYSE:GWRE - New York Stock Exchange, Inc. - US40171V1008 - Common Stock - Currency: USD
Taking everything into account, GWRE scores 5 out of 10 in our fundamental rating. GWRE was compared to 282 industry peers in the Software industry. While GWRE has a great health rating, its profitability is only average at the moment. GWRE is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year GWRE was profitable.
GWRE had a positive operating cash flow in the past year.
In the past 5 years GWRE always reported negative net income.
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 1.39%, GWRE is doing good in the industry, outperforming 67.73% of the companies in the same industry.
GWRE's Return On Equity of 2.54% is fine compared to the rest of the industry. GWRE outperforms 69.15% of its industry peers.
GWRE has a Return On Invested Capital of 0.84%. This is in the better half of the industry: GWRE outperforms 64.89% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.39% | ||
| ROE | 2.54% | ||
| ROIC | 0.84% |
ROA(3y)-4.58%
ROA(5y)-3.55%
ROE(3y)-7.4%
ROE(5y)-5.63%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
GWRE's Profit Margin of 3.04% is fine compared to the rest of the industry. GWRE outperforms 69.86% of its industry peers.
With a decent Operating Margin value of 1.94%, GWRE is doing good in the industry, outperforming 67.02% of the companies in the same industry.
The Gross Margin of GWRE (62.16%) is comparable to the rest of the industry.
GWRE's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 1.94% | ||
| PM (TTM) | 3.04% | ||
| GM | 62.16% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y4.51%
GM growth 5Y1.73%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), GWRE is destroying value.
The number of shares outstanding for GWRE has been increased compared to 1 year ago.
Compared to 5 years ago, GWRE has more shares outstanding
Compared to 1 year ago, GWRE has an improved debt to assets ratio.
2.2 Solvency
GWRE has an Altman-Z score of 11.11. This indicates that GWRE is financially healthy and has little risk of bankruptcy at the moment.
GWRE has a Altman-Z score of 11.11. This is amongst the best in the industry. GWRE outperforms 86.52% of its industry peers.
The Debt to FCF ratio of GWRE is 2.90, which is a good value as it means it would take GWRE, 2.90 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of GWRE (2.90) is better than 65.25% of its industry peers.
GWRE has a Debt/Equity ratio of 0.49. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.49, GWRE is doing worse than 64.54% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 2.9 | ||
| Altman-Z | 11.11 |
ROIC/WACC0.1
WACC8.77%
2.3 Liquidity
GWRE has a Current Ratio of 3.23. This indicates that GWRE is financially healthy and has no problem in meeting its short term obligations.
GWRE's Current ratio of 3.23 is fine compared to the rest of the industry. GWRE outperforms 79.08% of its industry peers.
A Quick Ratio of 3.23 indicates that GWRE has no problem at all paying its short term obligations.
GWRE's Quick ratio of 3.23 is fine compared to the rest of the industry. GWRE outperforms 79.08% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.23 | ||
| Quick Ratio | 3.23 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 67.12% over the past year.
Measured over the past years, GWRE shows a decrease in Earnings Per Share. The EPS has been decreasing by -1.43% on average per year.
Looking at the last year, GWRE shows a quite strong growth in Revenue. The Revenue has grown by 18.61% in the last year.
The Revenue has been growing slightly by 6.39% on average over the past years.
EPS 1Y (TTM)67.12%
EPS 3Y39.84%
EPS 5Y-1.43%
EPS Q2Q%238.46%
Revenue 1Y (TTM)18.61%
Revenue growth 3Y9.67%
Revenue growth 5Y6.39%
Sales Q2Q%21.95%
3.2 Future
Based on estimates for the next years, GWRE will show a very strong growth in Earnings Per Share. The EPS will grow by 33.40% on average per year.
The Revenue is expected to grow by 15.77% on average over the next years. This is quite good.
EPS Next Y86.44%
EPS Next 2Y47.39%
EPS Next 3Y40.99%
EPS Next 5Y33.4%
Revenue Next Year21.64%
Revenue Next 2Y18.01%
Revenue Next 3Y17.04%
Revenue Next 5Y15.77%
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.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 96.50 indicates a quite expensive valuation of GWRE.
Compared to the rest of the industry, the Price/Earnings ratio of GWRE is on the same level as its industry peers.
GWRE is valuated expensively when we compare the Price/Earnings ratio to 27.15, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 80.88, GWRE can be considered very expensive at the moment.
The rest of the industry has a similar Price/Forward Earnings ratio as GWRE.
GWRE is valuated expensively when we compare the Price/Forward Earnings ratio to 21.60, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 96.5 | ||
| Fwd PE | 80.88 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as GWRE.
The rest of the industry has a similar Price/Free Cash Flow ratio as GWRE.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 85.1 | ||
| EV/EBITDA | 420.48 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
GWRE's earnings are expected to grow with 40.99% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.12
PEG (5Y)N/A
EPS Next 2Y47.39%
EPS Next 3Y40.99%
5. Dividend
5.1 Amount
GWRE does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
235.45
+0.05 (+0.02%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners103.78%
Inst Owner Change32.12%
Ins Owners0.34%
Ins Owner Change-4.89%
Market Cap19.75B
Analysts80
Price Target253.74 (7.77%)
Short Float %3.13%
Short Ratio3.05
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)41.65%
Min EPS beat(2)-3.3%
Max EPS beat(2)86.6%
EPS beat(4)3
Avg EPS beat(4)33.94%
Min EPS beat(4)-3.3%
Max EPS beat(4)86.6%
EPS beat(8)7
Avg EPS beat(8)64.07%
EPS beat(12)10
Avg EPS beat(12)18.61%
EPS beat(16)14
Avg EPS beat(16)21.21%
Revenue beat(2)1
Avg Revenue beat(2)0.29%
Min Revenue beat(2)-0.61%
Max Revenue beat(2)1.18%
Revenue beat(4)3
Avg Revenue beat(4)0.78%
Min Revenue beat(4)-0.61%
Max Revenue beat(4)1.9%
Revenue beat(8)6
Avg Revenue beat(8)0.71%
Revenue beat(12)8
Avg Revenue beat(12)0.59%
Revenue beat(16)11
Avg Revenue beat(16)0.73%
PT rev (1m)16.61%
PT rev (3m)13.24%
EPS NQ rev (1m)3.36%
EPS NQ rev (3m)3.23%
EPS NY rev (1m)21.44%
EPS NY rev (3m)21.61%
Revenue NQ rev (1m)1.71%
Revenue NQ rev (3m)1.71%
Revenue NY rev (1m)0.84%
Revenue NY rev (3m)1.86%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 96.5 | ||
| Fwd PE | 80.88 | ||
| P/S | 17.36 | ||
| P/FCF | 85.1 | ||
| P/OCF | 79.06 | ||
| P/B | 14.49 | ||
| P/tB | 20.67 | ||
| EV/EBITDA | 420.48 |
EPS(TTM)2.44
EY1.04%
EPS(NY)2.91
Fwd EY1.24%
FCF(TTM)2.77
FCFY1.18%
OCF(TTM)2.98
OCFY1.26%
SpS13.56
BVpS16.24
TBVpS11.39
PEG (NY)1.12
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.39% | ||
| ROE | 2.54% | ||
| ROCE | 1.06% | ||
| ROIC | 0.84% | ||
| ROICexc | 1.5% | ||
| ROICexgc | 2.31% | ||
| OM | 1.94% | ||
| PM (TTM) | 3.04% | ||
| GM | 62.16% | ||
| FCFM | 20.4% |
ROA(3y)-4.58%
ROA(5y)-3.55%
ROE(3y)-7.4%
ROE(5y)-5.63%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y4.51%
GM growth 5Y1.73%
F-Score6
Asset Turnover0.46
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 2.9 | ||
| Debt/EBITDA | 14.84 | ||
| Cap/Depr | 76.06% | ||
| Cap/Sales | 1.56% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 550.16% | ||
| Profit Quality | 670.5% | ||
| Current Ratio | 3.23 | ||
| Quick Ratio | 3.23 | ||
| Altman-Z | 11.11 |
F-Score6
WACC8.77%
ROIC/WACC0.1
Cap/Depr(3y)72.71%
Cap/Depr(5y)71.28%
Cap/Sales(3y)2.16%
Cap/Sales(5y)2.77%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)67.12%
EPS 3Y39.84%
EPS 5Y-1.43%
EPS Q2Q%238.46%
EPS Next Y86.44%
EPS Next 2Y47.39%
EPS Next 3Y40.99%
EPS Next 5Y33.4%
Revenue 1Y (TTM)18.61%
Revenue growth 3Y9.67%
Revenue growth 5Y6.39%
Sales Q2Q%21.95%
Revenue Next Year21.64%
Revenue Next 2Y18.01%
Revenue Next 3Y17.04%
Revenue Next 5Y15.77%
EBIT growth 1Y141.06%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year106.38%
EBIT Next 3Y56.42%
EBIT Next 5Y31.2%
FCF growth 1Y444.56%
FCF growth 3Y28.91%
FCF growth 5Y21.38%
OCF growth 1Y587.44%
OCF growth 3Y20.6%
OCF growth 5Y11.01%