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Guidewire Software

GWRE
64
Software - Application · Technology
Also trades as: 0J1G.L GBP 1.89 (-0.67%)
Price
$189.00
-0.64 (-0.34%)
Market Cap
$15.50B
Winston Score
64
Winston is curious
A decent business — some strong pillars, some weaker.
Data as of Oct 25, 2026 · filings through Jul 31, 2026

§How the score breaks down

Quality
Good
16/30
Growth
Good
13/20
Cash Flow
Exceptional
10/10
Stability
Exceptional
9/10
Valuation
Good
5/10
Ownership
Good
8/15
Dividends
Not counted
n/a

61 of 95 counted points = Winston Score 64. Pillars marked n/a do not apply to this company and are left out of the total.

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§Winston Score History

The full picture

Guidewire Software makes software specifically for property and casualty (P&C) insurance companies. Its core products help insurers manage policies, process claims, and handle billing — basically the back-office systems that keep an insurance company running. Guidewire serves hundreds of P&C insurers around the world, from large national carriers to regional companies, and is one of the leading software platforms in this niche.

Guidewire earns most of its revenue through subscriptions, as it has been shifting customers from older on-premise software licenses to its cloud-based platform called Guidewire Cloud. The company operates globally, with customers across North America, Europe, and Asia-Pacific, and generates roughly $1 billion in annual revenue. Its main competitive advantage is how deeply its software gets embedded into a customer's operations, making it costly and disruptive to switch. The key growth driver is continued migration of existing customers to the cloud, though slowing insurance industry IT budgets or a prolonged migration timeline could weigh on results.

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Growth Profile

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+15.3% YoY

YoY Growth Rate

Steady revenue growth

Reported EPS Growth

-38.7% YoY

Quarterly reporting periods ended:

31 Jul 2025: $0.62

31 Jul 2026: $0.38

Reported/statutory EPS, not adjusted or underlying earnings. One-off items can affect this figure. Provider rounding can affect the growth rate.

YoY Growth Rate

Reported EPS decreased year over year

R&D Spend

$340M/ year

↑ Rising (+15% vs prior year)

23.1% of revenue

1.5x the sector average (15%)

Investing heavily in future products and technology

Insider Activity

9.3%ownership

↓ Declining

Insider ownership declining — could be dilution or selling

Cash Position

Cash flow positive

$1.2B cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Heavy R&D investment

Guidewire Software is putting 23% of revenue into R&D and that number is rising. That's 1.5x the sector average. And they're generating enough cash to self-fund it.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Share count broadly stable

+0.1% over 4y

The share count has stayed roughly flat over this period — little dilution or buyback activity.

Diluted shares outstanding: 83.6M (2022) → 83.6M (2026)

Score breakdown

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Quality

Profit per sale
Gross Margin
65.6%
Premium pricing power — 65.6% gross margin
Profit after running costs
Operating Margin
15.1%
Healthy — 15.1% operating margin
Return on the money invested
ROCE
7.9%
Weak — 7.9% return on capital

ROIC between 5% and 15%. They earn 5 to 15 cents back per year on every dollar invested.

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Growth

Sales growth
Sales YoY
+22.7%
Fast-growing sales (+22.7% YoY)
Profit growth
EPS YoY
+98.8%
Earnings growing fast (+98.8% YoY)

Earnings growing 25%+ a year. The compounder zone.

How steady the profit is
EPS Consistency
4/8 quarters
Earnings inconsistent quarter-to-quarter

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Cash Flow

Profit that turns into cash
Cash Conversion
224%
Turns 224% of profit into real cash
Spare cash per sale
FCF Margin
20.0%
Converts sales into free cash efficiently (20.0%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

What it owes vs what it owns
Debt / Equity
0.59
Conservative — low debt load (0.59)
Covers its interest
Interest Cover
22.69x
Comfortably covers interest (22.7x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

Price vs profit
P/E Ratio (TTM)
114.5x
Expensive — P/E 114.5

P/E over 35. The market is pricing in heavy, sustained growth.

Cheaper or dearer next year
P/E vs Forward
+72.8
GROWING
Earnings expected to grow meaningfully — cheaper on forward P/E (114.5 → 41.7)

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Dividends

Not applicable for this business.
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