GUIDEWIRE SOFTWARE INC (GWRE) Stock Fundamental Analysis
NYSE:GWRE - New York Stock Exchange, Inc. - US40171V1008 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to GWRE. GWRE was compared to 284 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. 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.
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 67.96% of the companies in the same industry.
Looking at the Return On Equity, with a value of 2.54%, GWRE is in the better half of the industry, outperforming 69.37% of the companies in the same industry.
GWRE's Return On Invested Capital of 0.84% is fine compared to the rest of the industry. GWRE outperforms 65.49% 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
Looking at the Profit Margin, with a value of 3.04%, GWRE is in the better half of the industry, outperforming 70.07% of the companies in the same industry.
Looking at the Operating Margin, with a value of 1.94%, GWRE is in the better half of the industry, outperforming 67.61% 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
GWRE has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
GWRE has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, GWRE has more shares outstanding
GWRE has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 11.62 indicates that GWRE is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 11.62, GWRE belongs to the top of the industry, outperforming 87.32% of the companies in the same industry.
GWRE has a debt to FCF ratio of 2.90. This is a good value and a sign of high solvency as GWRE would need 2.90 years to pay back of all of its debts.
GWRE has a Debt to FCF ratio of 2.90. This is in the better half of the industry: GWRE outperforms 65.49% 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 has a Debt to Equity ratio of 0.49. This is in the lower half of the industry: GWRE underperforms 64.08% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 2.9 | ||
| Altman-Z | 11.62 |
ROIC/WACC0.09
WACC8.86%
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.
Looking at the Current ratio, with a value of 3.23, GWRE is in the better half of the industry, outperforming 78.87% of the companies in the same industry.
A Quick Ratio of 3.23 indicates that GWRE has no problem at all paying its short term obligations.
GWRE has a better Quick ratio (3.23) than 78.87% 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.
GWRE shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 18.61%.
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 35.00% on average per year.
GWRE is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 15.81% yearly.
EPS Next Y53.53%
EPS Next 2Y42.79%
EPS Next 3Y39.61%
EPS Next 5Y35%
Revenue Next Year20.63%
Revenue Next 2Y17.29%
Revenue Next 3Y16.57%
Revenue Next 5Y15.81%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
With a Price/Earnings ratio of 97.44, GWRE can be considered very expensive at the moment.
GWRE's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 26.35. GWRE is valued rather expensively when compared to this.
Based on the Price/Forward Earnings ratio of 87.02, the valuation of GWRE can be described as expensive.
Based on the Price/Forward Earnings ratio, GWRE is valued a bit more expensive than the industry average as 60.92% of the companies are valued more cheaply.
GWRE's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 22.19.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 97.44 | ||
| Fwd PE | 87.02 |
4.2 Price Multiples
GWRE's Enterprise Value to EBITDA is on the same level as the industry average.
GWRE's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 85.93 | ||
| EV/EBITDA | 441.43 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates GWRE does not grow enough to justify the current Price/Earnings ratio.
GWRE's earnings are expected to grow with 39.61% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.82
PEG (5Y)N/A
EPS Next 2Y42.79%
EPS Next 3Y39.61%
5. Dividend
5.1 Amount
GWRE does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
237.75
-9.04 (-3.66%)
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-4.15%
Market Cap19.94B
Analysts80
Price Target253.74 (6.73%)
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)0%
PT rev (3m)-2.25%
EPS NQ rev (1m)3.36%
EPS NQ rev (3m)-6.85%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.89%
Revenue NQ rev (1m)1.71%
Revenue NQ rev (3m)1.4%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.01%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 97.44 | ||
| Fwd PE | 87.02 | ||
| P/S | 17.53 | ||
| P/FCF | 85.93 | ||
| P/OCF | 79.83 | ||
| P/B | 14.64 | ||
| P/tB | 20.87 | ||
| EV/EBITDA | 441.43 |
EPS(TTM)2.44
EY1.03%
EPS(NY)2.73
Fwd EY1.15%
FCF(TTM)2.77
FCFY1.16%
OCF(TTM)2.98
OCFY1.25%
SpS13.56
BVpS16.24
TBVpS11.39
PEG (NY)1.82
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 | 11.62 |
F-Score6
WACC8.86%
ROIC/WACC0.09
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 Y53.53%
EPS Next 2Y42.79%
EPS Next 3Y39.61%
EPS Next 5Y35%
Revenue 1Y (TTM)18.61%
Revenue growth 3Y9.67%
Revenue growth 5Y6.39%
Sales Q2Q%21.95%
Revenue Next Year20.63%
Revenue Next 2Y17.29%
Revenue Next 3Y16.57%
Revenue Next 5Y15.81%
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%