Guidewire Software provides software products for property and casualty (P&C) insurers. It offers an integrated suite of software applications that address the core processes, such as underwriting and policy administration, claims management, and billing. The company was founded in 2001 and is based in Foster City, California.
GWRE Price Forecast Based on DCF Valuation
DCF Fair Value Target:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for Guidewire Software Inc. To summarize, we found that Guidewire Software Inc ranked in the 10th percentile in terms of potential gain offered. We should note, though, that the most conservative analysis suggests this stock will yield negative results -- and thus may be a potential short opportunity. The most interesting components of our discounted cash flow analysis for Guidewire Software Inc ended up being:
The business' balance sheet reveals debt to be 4% of the company's capital (with equity being the remaining amount). Approximately only 14.64% of US stocks with free cash flow have a lower reliance on debt in their capital structure.
Guidewire Software Inc's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at 0.31. This coverage rate is greater than that of just 20.5% of stocks we're observing for the purpose of forecasting via discounted cash flows.
As a business, Guidewire Software Inc experienced a tax rate of about 182% over the past twelve months; relative to its sector (Technology), this tax rate is higher than 97.06% of stocks generating free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Technology that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as GWRE, try HBB, INOV, TTLO, CTG, and DOCU.