Guidewire Software Target of Unusually Large Options Trading (NYSE:GWRE)

Key Points

• Guidewire saw unusually large options activity as investors bought 1,297 call options — roughly a 1,563% increase over the typical daily volume — and the stock jumped about 9.4%, opening at $136.85.
• The company beat expectations for the quarter with $1.17 EPS vs. $0.77 expected and $359.1M revenue (up 24% year-over-year), and its board authorized a $500 million share buyback (about 3.1% of shares).
• Institutional interest is growing (Capital World Investors opened a ~$202M position and several funds materially increased holdings), while analysts hold a MarketBeat consensus of Moderate Buy with an average target of $249.85.

Guidewire Software, Inc. (NYSE:GWRE - Get Free Report) saw unusually large options trading activity on Wednesday. Stock investors purchased 1,297 call options on the stock. This represents an increase of approximately 1,563% compared to the typical daily volume of 78 call options.

Guidewire Software Stock Up 9.4%

GWRE stock opened at $136.85 on Thursday. Guidewire Software has a twelve month low of $115.57 and a twelve month high of $272.60. The company has a quick ratio of 2.93, a current ratio of 2.93 and a debt-to-equity ratio of 0.45. The stock has a market cap of $11.59 billion, a P/E ratio of 62.20, a PEG ratio of 5.40 and a beta of 1.05. The business's 50-day moving average price is $142.87 and its 200-day moving average price is $184.03.

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, beating analysts' consensus estimates of $0.77 by $0.40. Guidewire Software had a return on equity of 13.44% and a net margin of 14.11%.The firm had revenue of $359.10 million for the quarter, compared to analysts' expectations of $342.88 million. During the same period in the previous year, the firm earned $0.51 EPS. The business's quarterly revenue was up 24.0% on a year-over-year basis. On average, equities research analysts forecast that Guidewire Software will post 0.52 EPS for the current year.

Guidewire Software declared that its board has authorized a share repurchase plan on Thursday, January 8th that permits the company to buyback $500.00 million in outstanding shares. This buyback authorization permits the technology company to buy up to 3.1% of its stock through open market purchases. Stock buyback plans are often an indication that the company's board believes its shares are undervalued.

Wall Street Analyst Weigh In

Several research analysts have issued reports on GWRE shares. Wells Fargo & Company dropped their target price on Guidewire Software from $250.00 to $210.00 and set an "overweight" rating on the stock in a research report on Wednesday, February 4th. Weiss Ratings reiterated a "hold (c)" rating on shares of Guidewire Software in a research note on Thursday, January 22nd. DA Davidson reiterated a "buy" rating and set a $246.00 price target on shares of Guidewire Software in a research note on Tuesday, March 10th. BTIG Research lifted their price target on shares of Guidewire Software from $175.00 to $200.00 and gave the stock a "buy" rating in a research note on Friday, March 6th. Finally, Royal Bank Of Canada dropped their price target on shares of Guidewire Software from $300.00 to $250.00 and set an "outperform" rating on the stock in a research note on Friday, March 6th. One research analyst has rated the stock with a Strong Buy rating, eleven have given a Buy rating, three have assigned a Hold rating and one has issued a Sell rating to the company. Based on data from MarketBeat, the company has a consensus rating of "Moderate Buy" and an average target price of $249.85.

Insider Buying and Selling

In other Guidewire Software news, CEO Michael George Rosenbaum sold 1,200 shares of the firm's stock in a transaction dated Monday, April 13th. The stock was sold at an average price of $118.77, for a total value of $142,524.00. Following the transaction, the chief executive officer directly owned 216,406 shares of the company's stock, valued at approximately $25,702,540.62. This trade represents a 0.55% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CAO David Franklin Peterson sold 273 shares of the firm's stock in a transaction dated Tuesday, March 17th. The stock was sold at an average price of $163.86, for a total value of $44,733.78. Following the completion of the transaction, the chief accounting officer directly owned 12,533 shares in the company, valued at $2,053,657.38. The trade was a 2.13% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders have sold a total of 31,279 shares of company stock valued at $4,887,686 in the last ninety days. Corporate insiders own 0.46% of the company's stock.

Institutional Inflows and Outflows

A number of large investors have recently modified their holdings of GWRE. Capital World Investors purchased a new position in Guidewire Software in the 4th quarter worth approximately $202,405,000. Alliancebernstein L.P. lifted its holdings in Guidewire Software by 405.1% in the 2nd quarter. Alliancebernstein L.P. now owns 538,303 shares of the technology company's stock worth $126,743,000 after purchasing an additional 431,725 shares in the last quarter. Stockbridge Partners LLC lifted its holdings in Guidewire Software by 39.0% in the 4th quarter. Stockbridge Partners LLC now owns 1,445,206 shares of the technology company's stock worth $290,501,000 after purchasing an additional 405,850 shares in the last quarter. M&T Bank Corp lifted its holdings in Guidewire Software by 4,507.8% in the 4th quarter. M&T Bank Corp now owns 318,675 shares of the technology company's stock worth $64,057,000 after purchasing an additional 311,759 shares in the last quarter. Finally, Allspring Global Investments Holdings LLC lifted its holdings in Guidewire Software by 112.6% in the 4th quarter. Allspring Global Investments Holdings LLC now owns 479,859 shares of the technology company's stock worth $90,036,000 after purchasing an additional 254,142 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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