Traders Buy Large Volume of Call Options on Guidewire Software (NYSE:GWRE)

Key Points

• Traders bought an unusually large volume of calls—1,297 call options—a 1,563% increase versus the average daily volume of 78, suggesting heightened bullish speculation on GWRE.
• Company insiders have been selling: CEO Michael George Rosenbaum sold 4,737 shares at $163.86 and CFO Jeffrey Cooper sold 4,757 shares at $158.72, with insiders dumping 30,295 shares worth about $4.82 million in the last quarter (insiders now own 0.46% of the stock).
• Guidewire beat quarterly expectations (EPS $1.17 vs. $0.77 est., revenue $359.1M, +24% YoY) and its board authorized a $500 million share buyback (up to 3.1% of shares), while analysts maintain a consensus "Moderate Buy" rating.

Guidewire Software, Inc. (NYSE:GWRE - Get Free Report) was the target of unusually large options trading activity on Wednesday. Stock traders purchased 1,297 call options on the company. This represents an increase of 1,563% compared to the average daily volume of 78 call options.

Insider Activity at Guidewire Software

In other news, CEO Michael George Rosenbaum sold 4,737 shares of the company's stock in a transaction on Tuesday, March 17th. The shares were sold at an average price of $163.86, for a total transaction of $776,204.82. Following the completion of the transaction, the chief executive officer directly owned 221,206 shares in the company, valued at approximately $36,246,815.16. This represents a 2.10% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, CFO Jeffrey Elliott Cooper sold 4,757 shares of the stock in a transaction on Friday, March 13th. The shares were sold at an average price of $158.72, for a total value of $755,031.04. Following the completion of the transaction, the chief financial officer owned 67,996 shares of the company's stock, valued at $10,792,325.12. The trade was a 6.54% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 30,295 shares of company stock valued at $4,819,906 in the last quarter. Insiders own 0.46% of the company's stock.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in GWRE. IFP Advisors Inc raised its stake in Guidewire Software by 4.6% in the 3rd quarter. IFP Advisors Inc now owns 1,104 shares of the technology company's stock valued at $254,000 after acquiring an additional 49 shares during the period. Earned Wealth Advisors LLC boosted its position in 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 purchasing an additional 51 shares during the period. Smartleaf Asset Management LLC increased its stake in shares of Guidewire Software by 9.3% in the third quarter. Smartleaf Asset Management LLC now owns 624 shares of the technology company's stock worth $145,000 after purchasing an additional 53 shares in the last quarter. PDS Planning Inc increased its stake in shares of 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 purchasing an additional 55 shares in the last quarter. Finally, American Trust raised its position in shares of Guidewire Software by 3.9% in the third quarter. American Trust now owns 1,632 shares of the technology company's stock valued at $375,000 after purchasing an additional 61 shares during the period.

Guidewire Software Stock Performance

Shares of GWRE opened at $148.58 on Thursday. The company has a debt-to-equity ratio of 0.45, a current ratio of 2.93 and a quick ratio of 2.93. The stock has a 50-day moving average of $145.44 and a 200-day moving average of $191.48. The company has a market cap of $12.58 billion, a PE ratio of 67.54, a P/E/G ratio of 6.45 and a beta of 1.05. Guidewire Software has a one year low of $120.37 and a one year high of $272.60.

Guidewire Software (NYSE:GWRE - Get Free Report) last issued its earnings results 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. Guidewire Software had a return on equity of 13.44% and a net margin of 14.11%.The company had revenue of $359.10 million for the quarter, compared to analyst estimates of $342.88 million. During the same period in the prior year, the firm earned $0.51 earnings per share. Guidewire Software's revenue for the quarter was up 24.0% on a year-over-year basis. On average, equities research analysts predict that Guidewire Software will post 0.52 EPS for the current fiscal year.

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

Wall Street Analysts Forecast Growth

A number of brokerages have issued reports on GWRE. Weiss Ratings reaffirmed a "hold (c)" rating on shares of Guidewire Software in a report on Thursday, January 22nd. Stifel Nicolaus reduced their price target on Guidewire Software from $300.00 to $250.00 and set a "buy" rating on the stock in a report on Friday, March 6th. Citigroup upped their price objective on Guidewire Software from $242.00 to $245.00 and gave the company a "neutral" rating in a research note on Friday, December 5th. Royal Bank Of Canada dropped 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 Friday, March 6th. Finally, DA Davidson reiterated a "buy" rating and set a $246.00 target price on shares of Guidewire Software in a research report on Tuesday, March 10th. One equities research analyst has rated the stock with a Strong Buy rating, eleven have assigned a Buy rating, three have given a Hold rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat, the company has a consensus rating of "Moderate Buy" and a consensus price target of $249.85.

About Guidewire Software

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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