GUIDEWIRE SOFTWARE INC (GWRE) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:GWRE - US40171V1008 - Common Stock
161.725 USD
+1.44 (+0.9%)
We assign a fundamental rating of 5 out of 10 to GWRE. GWRE was compared to 278 industry peers in the Software industry. GWRE is in great health and has no worries on liquidiy or solvency at all, but the profibility rating is only average. GWRE is valued quite expensively, but it does show have an excellent growth rating.
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.
- In the past 5 years GWRE reported 4 times negative net income.
- Of the past 5 years GWRE 4 years had a positive operating cash flow.
1.2 Ratios
- The Return On Assets of GWRE (3.48%) is better than 67.27% of its industry peers.
- GWRE has a Return On Equity of 6.00%. This is in the better half of the industry: GWRE outperforms 69.42% of its industry peers.
- The Return On Invested Capital of GWRE (2.26%) is better than 66.91% of its industry peers.
| 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
- GWRE has a Profit Margin of 7.23%. This is in the better half of the industry: GWRE outperforms 66.91% of its industry peers.
- GWRE's Operating Margin of 5.05% is fine compared to the rest of the industry. GWRE outperforms 67.99% of its industry peers.
- With a Gross Margin value of 63.13%, GWRE perfoms like the industry average, outperforming 40.65% of the companies in the same industry.
- GWRE's Gross Margin has improved in the last couple of years.
| 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%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so GWRE is destroying value.
- GWRE has more shares outstanding than it did 1 year ago.
- GWRE has more shares outstanding than it did 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 8.12. This indicates that GWRE is financially healthy and has little risk of bankruptcy at the moment.
- GWRE has a Altman-Z score of 8.12. This is amongst the best in the industry. GWRE outperforms 85.25% 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.
- With a decent Debt to FCF ratio value of 2.50, GWRE is doing good in the industry, outperforming 65.47% of the companies in the same industry.
- A Debt/Equity ratio of 0.44 indicates that GWRE is not too dependend on debt financing.
- The Debt to Equity ratio of GWRE (0.44) is worse than 63.67% of its industry peers.
- Even though the debt/equity ratio score it not favorable for GWRE, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.44 | ||
| Debt/FCF | 2.5 | ||
| Altman-Z | 8.12 |
ROIC/WACC0.21
WACC10.93%
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 77.70% of its industry peers.
- GWRE has a Quick Ratio of 3.48. This indicates that GWRE is financially healthy and has no problem in meeting its short term obligations.
- The Quick ratio of GWRE (3.48) is better than 77.70% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.48 | ||
| Quick Ratio | 3.48 |
3. Growth
3.1 Past
- GWRE shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 63.28%, which is quite impressive.
- GWRE shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 16.12% yearly.
- The Revenue has grown by 22.80% in the past year. This is a very strong growth!
- Measured over the past years, GWRE shows a quite strong growth in Revenue. The Revenue has been growing by 10.13% on average per year.
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
- GWRE is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 21.41% yearly.
- 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 Year19.37%
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.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 55.96 indicates a quite expensive valuation of GWRE.
- GWRE's Price/Earnings is on the same level as the industry average.
- GWRE's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 28.82.
- With a Price/Forward Earnings ratio of 41.05, GWRE can be considered very expensive at the moment.
- GWRE's Price/Forward Earnings is on the same level as the industry average.
- GWRE is valuated expensively when we compare the Price/Forward Earnings ratio to 25.95, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 55.96 | ||
| Fwd PE | 41.05 |
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.
- GWRE's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 50.84 | ||
| EV/EBITDA | 144.24 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- GWRE's earnings are expected to grow with 21.51% in the coming years. This may justify a more expensive valuation.
PEG (NY)4.23
PEG (5Y)3.47
EPS Next 2Y21.69%
EPS Next 3Y21.51%
5. Dividend
5.1 Amount
- GWRE does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
GUIDEWIRE SOFTWARE INC / GWRE FAQ
Can you provide the ChartMill fundamental rating for GUIDEWIRE SOFTWARE INC?
ChartMill assigns a fundamental rating of 5 / 10 to GWRE.
Can you provide the valuation status for GUIDEWIRE SOFTWARE INC?
ChartMill assigns a valuation rating of 2 / 10 to GUIDEWIRE SOFTWARE INC (GWRE). This can be considered as Overvalued.
What is the profitability of GWRE stock?
GUIDEWIRE SOFTWARE INC (GWRE) has a profitability rating of 4 / 10.
What is the valuation of GUIDEWIRE SOFTWARE INC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for GUIDEWIRE SOFTWARE INC (GWRE) is 55.96 and the Price/Book (PB) ratio is 8.97.
Can you provide the financial health for GWRE stock?
The financial health rating of GUIDEWIRE SOFTWARE INC (GWRE) is 7 / 10.