Guidewire Software (GWRE)
NYSEInformation TechnologySoftware - ApplicationSnapshot 2026-09-04
$162.42-19.93%
Close 2026-09-04 · 1-day change
NYSEInformation TechnologySoftware - ApplicationSnapshot 2026-09-04
Intact: The reason to own it still holds.
Guidewire grows revenue about 27% year over year. It raised revenue guidance to $1.46B-$1.47B for fiscal Q2 2026. Free cash flow guidance also improved to $365M-$380M. Profit margins are expected to rise with operating income guidance raised.
The stock is selling off despite earnings beats and raised guidance. The recent guidance cut signals risks to future revenue growth. Profit margin improvement is uncertain with mixed management status. Elevated valuation and market stress add pressure.
The price is about 10% below our fair value near $154. Analysts expect about 19% revenue growth. Our fair value is 28% below the Street median, reflecting more cautious outlook than consensus.
Breaks if: free cash flow falls below $360M in fiscal Q2 2026
Breaks if: Guidance cut or downward revision in next 2 quarters
Breaks if: operating income falls below $120M in fiscal Q2 2026
This is not a price target or investment advice.
A long-form read on the 1–3 year hold thesis. It updates when the weekly evidence changes.
This investment represents a durable compounder with a focus on growth and profitability. The current thesis state is intact, supported by strong recent financial performance despite elevated risks and valuation concerns.
The market appears to be pricing in a high level of fragility due to expensive valuation and weak execution quality. There is an expectations gap, indicating that the current valuation may not be justified given the risks involved.
Fundamentals are likely to remain strong in the near term, as management is on track with priorities like raising revenue and operating income guidance. However, there is a low probability of missing expectations, which could impact sentiment.
The thesis hinges on several factors, including the potential for the Fed to cut rates, which could benefit tech stocks like GWRE. Additionally, the performance of sector bellwethers like SAP and CRM will be important for maintaining momentum.
The most important moves since the prior daily snapshot.
Yes, our read has weakened. The company reported a strong earnings beat. However, a weak outlook threatens revenue and income growth objectives. The stock fell sharply, suggesting a market repricing. Investors are concerned about AI disruption risks affecting the software sector.
as of 2026-09-04
Review the evidence to watch, what would become a concern, and what would make it less concerning.
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.
Breaks if: revenue falls below $1.40B in fiscal Q2 2026
Continue to grow total revenue and annual recurring revenue (ARR) with a raised fiscal year 2026 revenue outlook.
Stated as a priority in 4 of last 4 quarters. Total revenue grew 23% from approximately $1,199 million in fiscal year 2025 to $1,475.4 million in fiscal year 2026, while ARR grew 19% to $1,242 million. Management has consistently raised the fiscal year revenue outlook reflecting strong sales momentum and pipeline visibility, delivering on this growth priority.
“We are raising our fiscal year outlook for revenue, operating income, and cash flow based on better than expected Q3 results.”
“We are raising our fiscal year outlook for revenue, operating income, and cash flow based on better than expected Q3 results and greater visibility.”
“We are raising our fiscal year outlook across the board and this is informed by our better than expected Q2 results and the continued strength of our pipeline.”
“Guidewire is issuing the following updated outlook for fiscal year 2026 based on current expectations: Total revenue between $1,403 million and $1,419 million.”
Over the next 1 to 3 years, GWRE's performance will depend on its ability to navigate risks while capitalizing on growth opportunities. Not investment advice.