Back to top

Guidewire Software (GWRE) Outpaces Stock Market Gains: What You Should Know

Read MoreHide Full Article

Guidewire Software (GWRE - Free Report) closed at $99.22 in the latest trading session, marking a +0.78% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.57%. Elsewhere, the Dow gained 0.23%, while the tech-heavy Nasdaq added 0.99%.

Coming into today, shares of the provider of software to the insurance industry had gained 14.26% in the past month. In that same time, the Computer and Technology sector gained 3.63%, while the S&P 500 gained 3.01%.

Investors will be hoping for strength from GWRE as it approaches its next earnings release, which is expected to be September 5, 2018. On that day, GWRE is projected to report earnings of $0.76 per share, which would represent year-over-year growth of 28.81%. Meanwhile, our latest consensus estimate is calling for revenue of $239.25 million, up 32.11% from the prior-year quarter.

Any recent changes to analyst estimates for GWRE should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. GWRE is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that GWRE has a Forward P/E ratio of 78.01 right now. For comparison, its industry has an average Forward P/E of 33.8, which means GWRE is trading at a premium to the group.

Also, we should mention that GWRE has a PEG ratio of 9.75. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Business - Software Services was holding an average PEG ratio of 3.38 at yesterday's closing price.

The Business - Software Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 54, which puts it in the top 21% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Guidewire Software, Inc. (GWRE) - free report >>

More from Zacks Tale of the Tape

You May Like