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 283 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 quite expensive at the moment. It does show a decent growth rate.
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 always reported negative net income.
GWRE had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 1.39%, GWRE is in the better half of the industry, outperforming 65.85% 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 67.61% of its industry peers.
With a decent Return On Invested Capital value of 0.84%, GWRE is doing good in the industry, outperforming 63.38% 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 68.31% 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 65.49% of the companies in the same industry.
Looking at the Gross Margin, with a value of 62.16%, GWRE is in line with its industry, outperforming 42.25% of the companies in the same industry.
In the last couple of years the Gross Margin of GWRE has grown nicely.
| 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.
Compared to 1 year ago, GWRE has more shares outstanding
GWRE has more shares outstanding than it did 5 years ago.
The debt/assets ratio for GWRE has been reduced compared to a year ago.
2.2 Solvency
GWRE has an Altman-Z score of 10.16. 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 10.16, GWRE belongs to the top of the industry, outperforming 87.68% 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 65.14% of its industry peers.
A Debt/Equity ratio of 0.49 indicates that GWRE is not too dependend on debt financing.
GWRE has a worse Debt to Equity ratio (0.49) than 65.14% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 2.9 | ||
| Altman-Z | 10.16 |
ROIC/WACC0.08
WACC10.56%
2.3 Liquidity
A Current Ratio of 3.23 indicates that GWRE has no problem at all paying its short term obligations.
With a decent Current ratio value of 3.23, GWRE is doing good in the industry, outperforming 78.17% 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 78.17% 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.
GWRE shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -1.43% yearly.
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
The Earnings Per Share is expected to grow by 33.40% 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 15.77% on average per year.
EPS Next Y86.49%
EPS Next 2Y45.89%
EPS Next 3Y41%
EPS Next 5Y33.4%
Revenue Next Year21.74%
Revenue Next 2Y18.06%
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
GWRE is valuated quite expensively with a Price/Earnings ratio of 87.41.
GWRE's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 26.48. GWRE is valued rather expensively when compared to this.
With a Price/Forward Earnings ratio of 74.78, GWRE can be considered very expensive at the moment.
GWRE's Price/Forward Earnings is on the same level as the industry average.
GWRE's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 34.04.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 87.41 | ||
| Fwd PE | 74.78 |
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 is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 77.38 | ||
| EV/EBITDA | 381.01 |
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 41.00% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.01
PEG (5Y)N/A
EPS Next 2Y45.89%
EPS Next 3Y41%
5. Dividend
5.1 Amount
No dividends for GWRE!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
213.27
-4.16 (-1.91%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners103.46%
Inst Owner Change-0.26%
Ins Owners0.29%
Ins Owner Change-5.1%
Market Cap17.96B
Analysts80
Price Target254.16 (19.17%)
Short Float %2.49%
Short Ratio2.27
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)0.17%
PT rev (3m)16.81%
EPS NQ rev (1m)0.34%
EPS NQ rev (3m)3.71%
EPS NY rev (1m)0%
EPS NY rev (3m)21.47%
Revenue NQ rev (1m)0.02%
Revenue NQ rev (3m)1.73%
Revenue NY rev (1m)0.08%
Revenue NY rev (3m)0.92%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 87.41 | ||
| Fwd PE | 74.78 | ||
| P/S | 15.79 | ||
| P/FCF | 77.38 | ||
| P/OCF | 71.88 | ||
| P/B | 13.18 | ||
| P/tB | 18.79 | ||
| EV/EBITDA | 381.01 |
EPS(TTM)2.44
EY1.14%
EPS(NY)2.85
Fwd EY1.34%
FCF(TTM)2.76
FCFY1.29%
OCF(TTM)2.97
OCFY1.39%
SpS13.51
BVpS16.18
TBVpS11.35
PEG (NY)1.01
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 | 10.16 |
F-Score6
WACC10.56%
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 Year21.74%
Revenue Next 2Y18.06%
Revenue Next 3Y17.04%
Revenue Next 5Y15.77%
EBIT growth 1Y141.06%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year114.45%
EBIT Next 3Y56.26%
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%