GUIDEWIRE SOFTWARE INC (GWRE) Stock Fundamental Analysis
NYSE:GWRE - New York Stock Exchange, Inc. - US40171V1008 - Common Stock - Currency: USD
GWRE gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 282 industry peers in the Software industry. GWRE has an excellent financial health rating, but there are some minor concerns on its profitability. While showing a medium growth rate, GWRE is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
GWRE had positive earnings in the past year.
In the past year GWRE had a positive cash flow from operations.
GWRE had negative earnings in each of the past 5 years.
GWRE had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
The Return On Assets of GWRE (1.39%) is better than 67.73% of its industry peers.
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.
Looking at the Return On Invested Capital, with a value of 0.84%, GWRE is in the better half of the industry, outperforming 64.89% of the companies in the same industry.
| 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
With a decent Profit Margin value of 3.04%, GWRE is doing good in the industry, outperforming 69.86% of the companies in the same industry.
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so GWRE is destroying value.
Compared to 1 year ago, GWRE has more shares outstanding
The number of shares outstanding for GWRE has been increased compared to 5 years ago.
GWRE has a better debt/assets ratio than last year.
2.2 Solvency
GWRE has an Altman-Z score of 10.51. This indicates that GWRE is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 10.51, GWRE belongs to the top of the industry, outperforming 84.75% of the companies in the same industry.
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.
GWRE's Debt to Equity ratio of 0.49 is on the low side compared to the rest of the industry. GWRE is outperformed by 64.54% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 2.9 | ||
| Altman-Z | 10.51 |
ROIC/WACC0.08
WACC10.69%
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 has a better Current ratio (3.23) than 79.08% of its industry peers.
GWRE has a Quick Ratio of 3.23. This indicates that GWRE is financially healthy and has no problem in meeting its short term obligations.
The Quick ratio of GWRE (3.23) is better than 79.08% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.23 | ||
| Quick Ratio | 3.23 |
3. Growth
3.1 Past
GWRE shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 67.12%, which is quite impressive.
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.
Measured over the past years, GWRE shows a small growth in Revenue. The Revenue has been growing by 6.39% on average per year.
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 Y86.49%
EPS Next 2Y45.89%
EPS Next 3Y41%
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 90.92 indicates a quite expensive valuation of GWRE.
GWRE's Price/Earnings is on the same level as the industry average.
When comparing the Price/Earnings ratio of GWRE to the average of the S&P500 Index (27.50), we can say GWRE is valued expensively.
The Price/Forward Earnings ratio is 77.78, which means the current valuation is very expensive for GWRE.
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 36.44, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 90.92 | ||
| Fwd PE | 77.78 |
4.2 Price Multiples
GWRE's Enterprise Value to EBITDA is on the same level as the industry average.
The rest of the industry has a similar Price/Free Cash Flow ratio as GWRE.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 80.49 | ||
| EV/EBITDA | 395.62 |
4.3 Compensation for Growth
GWRE's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
A more expensive valuation may be justified as GWRE's earnings are expected to grow with 41.00% in the coming years.
PEG (NY)1.05
PEG (5Y)N/A
EPS Next 2Y45.89%
EPS Next 3Y41%
5. Dividend
5.1 Amount
GWRE does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
221.84
+0.69 (+0.31%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners103.78%
Inst Owner Change-0.01%
Ins Owners0.34%
Ins Owner Change-5.24%
Market Cap18.68B
Analysts80
Price Target253.74 (14.38%)
Short Float %2.58%
Short Ratio2.36
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)16.48%
EPS NQ rev (1m)0%
EPS NQ rev (3m)3.36%
EPS NY rev (1m)21.47%
EPS NY rev (3m)21.64%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.71%
Revenue NY rev (1m)0.84%
Revenue NY rev (3m)0.84%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 90.92 | ||
| Fwd PE | 77.78 | ||
| P/S | 16.42 | ||
| P/FCF | 80.49 | ||
| P/OCF | 74.77 | ||
| P/B | 13.71 | ||
| P/tB | 19.55 | ||
| EV/EBITDA | 395.62 |
EPS(TTM)2.44
EY1.1%
EPS(NY)2.85
Fwd EY1.29%
FCF(TTM)2.76
FCFY1.24%
OCF(TTM)2.97
OCFY1.34%
SpS13.51
BVpS16.18
TBVpS11.35
PEG (NY)1.05
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 | 10.51 |
F-Score6
WACC10.69%
ROIC/WACC0.08
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 Y86.49%
EPS Next 2Y45.89%
EPS Next 3Y41%
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%