Guidewire Software (NYSE:GWRE) Stock Price Down 7.2% - Here's Why

Key Points

• Shares fell 7.2% to about $127 on Thursday with just 289,030 shares traded (an 82% decline versus average volume), after closing the prior session at $136.87.
• Guidewire beat expectations for the quarter—EPS $1.17 vs. $0.77 and revenue $359.1M (+24% YoY)—and its board authorized a $500M share buyback (up to 3.1% of shares).
• Analysts maintain a consensus rating of “Moderate Buy” with an average price target of $249.85 despite several price-target cuts, while insiders sold roughly 31,495 shares (~$5M) over the last quarter.

Guidewire Software, Inc. (NYSE:GWRE - Get Free Report) shares traded down 7.2% on Thursday . The stock traded as low as $125.40 and last traded at $127.0260. 289,030 shares changed hands during trading, a decline of 82% from the average session volume of 1,613,056 shares. The stock had previously closed at $136.87.

Analyst Ratings Changes

Several research analysts recently weighed in on the stock. Citizens Jmp restated a "market outperform" rating and set a $281.00 price target on shares of Guidewire Software in a research report on Wednesday, December 10th. Wells Fargo & Company reduced their price target on shares of Guidewire Software from $250.00 to $210.00 and set an "overweight" rating for the company in a research report on Wednesday, February 4th. DA Davidson restated a "buy" rating and set a $246.00 price target on shares of Guidewire Software in a research report on Tuesday, March 10th. Oppenheimer cut their price objective on shares of Guidewire Software from $300.00 to $250.00 and set an "outperform" rating for the company in a report on Tuesday, February 24th. Finally, Zacks Research upgraded shares of Guidewire Software from a "hold" rating to a "strong-buy" rating in a report on Friday, March 13th. One investment analyst has rated the stock with a Strong Buy rating, eleven have issued a Buy rating, three have given a Hold rating and one has given a Sell rating to the stock. According to MarketBeat, the company currently has a consensus rating of "Moderate Buy" and an average price target of $249.85.

Guidewire Software Stock Performance

The firm's 50 day moving average price is $144.05 and its two-hundred day moving average price is $187.94. The company has a debt-to-equity ratio of 0.45, a quick ratio of 2.93 and a current ratio of 2.93. The firm has a market cap of $10.72 billion, a PE ratio of 57.62, a PEG ratio of 6.50 and a beta of 1.05.

Guidewire Software (NYSE:GWRE - Get Free Report) last posted its quarterly earnings data on Thursday, March 5th. The technology company reported $1.17 earnings per share for the quarter, topping analysts' consensus estimates of $0.77 by $0.40. The firm had revenue of $359.10 million during the quarter, compared to analysts' expectations of $342.88 million. Guidewire Software had a net margin of 14.11% and a return on equity of 13.44%. The firm's quarterly revenue was up 24.0% on a year-over-year basis. During the same quarter last year, the company posted $0.51 EPS. On average, research analysts forecast that Guidewire Software, Inc. will post 0.52 earnings per share for the current year.

Guidewire Software declared that its board has authorized a share buyback program on Thursday, January 8th that authorizes the company to buyback $500.00 million in shares. This buyback authorization authorizes the technology company to buy up to 3.1% of its shares through open market purchases. Shares buyback programs are generally a sign that the company's board believes its stock is undervalued.

Insider Activity

In related news, CEO Michael George Rosenbaum sold 4,737 shares of Guidewire Software stock in a transaction that occurred on Tuesday, March 17th. The shares were sold at an average price of $163.86, for a total value of $776,204.82. Following the completion of the transaction, the chief executive officer owned 221,206 shares in the company, valued at approximately $36,246,815.16. The trade was a 2.10% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is accessible through this hyperlink. Also, CFO Jeffrey Elliott Cooper sold 4,757 shares of the company's stock in a transaction that occurred on Friday, March 13th. The stock was sold at an average price of $158.72, for a total transaction of $755,031.04. Following the sale, the chief financial officer directly owned 67,996 shares in the company, valued at approximately $10,792,325.12. The trade was a 6.54% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last quarter, insiders sold 31,495 shares of company stock valued at $5,001,274. 0.46% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently bought and sold shares of GWRE. IFP Advisors Inc increased its holdings in Guidewire Software by 4.6% during the 3rd quarter. IFP Advisors Inc now owns 1,104 shares of the technology company's stock worth $254,000 after purchasing an additional 49 shares during the period. Earned Wealth Advisors LLC increased its stake in shares of Guidewire Software by 5.4% during the third quarter. Earned Wealth Advisors LLC now owns 989 shares of the technology company's stock worth $227,000 after buying an additional 51 shares during the period. Smartleaf Asset Management LLC raised its holdings in Guidewire Software by 9.3% in the third quarter. Smartleaf Asset Management LLC now owns 624 shares of the technology company's stock valued at $145,000 after acquiring an additional 53 shares in the last quarter. PDS Planning Inc lifted its stake in Guidewire Software by 6.4% in the third quarter. PDS Planning Inc now owns 911 shares of the technology company's stock worth $209,000 after acquiring an additional 55 shares during the last quarter. Finally, American Trust grew its holdings in Guidewire Software by 3.9% during the 3rd quarter. American Trust now owns 1,632 shares of the technology company's stock worth $375,000 after acquiring an additional 61 shares in the last quarter.

Guidewire Software Company Profile

Guidewire Software, Inc develops software products and cloud services for property and casualty (P&C) insurance carriers. Headquartered in San Mateo, California, the company's offerings are designed to help insurers manage the core functions of their business—policy administration, billing and claims—while supporting digital engagement, analytics and operational modernization.

Guidewire's core product portfolio is commonly known as the InsuranceSuite, which includes PolicyCenter for policy administration, BillingCenter for billing and receivables, and ClaimCenter for claims management.

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