Guidewire Software Return On Equity vs. Cash And Equivalents

GWRE Stock  USD 195.26  1.17  0.60%   
Based on the measurements of profitability obtained from Guidewire Software's financial statements, Guidewire Software may not be well positioned to generate adequate gross income at the present time. It has a very high chance of underperforming in December. Profitability indicators assess Guidewire Software's ability to earn profits and add value for shareholders.
 
Return On Equity  
First Reported
2010-12-31
Previous Quarter
(0)
Current Value
(0)
Quarterly Volatility
0.08350625
 
Credit Downgrade
 
Yuan Drop
 
Covid
As of November 15, 2024, Price To Sales Ratio is expected to decline to 7.21. In addition to that, Days Sales Outstanding is expected to decline to 55.62. At present, Guidewire Software's Interest Income is projected to increase significantly based on the last few years of reporting. The current year's Net Interest Income is expected to grow to about 38.6 M, whereas Operating Income is projected to grow to (49.9 M).
Current ValueLast YearChange From Last Year 10 Year Trend
Gross Profit Margin0.620.595
Sufficiently Up
Pretty Stable
For Guidewire Software profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Guidewire Software to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Guidewire Software utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Guidewire Software's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Guidewire Software over time as well as its relative position and ranking within its peers.
  

Guidewire Software's Revenue Breakdown by Earning Segment

Check out Risk vs Return Analysis.
For information on how to trade Guidewire Stock refer to our How to Trade Guidewire Stock guide.
Is Application Software space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Guidewire Software. If investors know Guidewire will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Guidewire Software listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
0.349
Earnings Share
(0.08)
Revenue Per Share
11.915
Quarterly Revenue Growth
0.08
Return On Assets
(0.02)
The market value of Guidewire Software is measured differently than its book value, which is the value of Guidewire that is recorded on the company's balance sheet. Investors also form their own opinion of Guidewire Software's value that differs from its market value or its book value, called intrinsic value, which is Guidewire Software's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Guidewire Software's market value can be influenced by many factors that don't directly affect Guidewire Software's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Guidewire Software's value and its price as these two are different measures arrived at by different means. Investors typically determine if Guidewire Software is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Guidewire Software's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

Guidewire Software Cash And Equivalents vs. Return On Equity Fundamental Analysis

Comparative valuation techniques use various fundamental indicators to help in determining Guidewire Software's current stock value. Our valuation model uses many indicators to compare Guidewire Software value to that of its competitors to determine the firm's financial worth.
Guidewire Software is rated below average in return on equity category among its peers. It is one of the top stocks in cash and equivalents category among its peers . At present, Guidewire Software's Return On Equity is projected to slightly decrease based on the last few years of reporting. Comparative valuation analysis is a catch-all technique that is used if you cannot value Guidewire Software by discounting back its dividends or cash flows. It compares the stock's price multiples to nearest competition to determine if the stock is relatively undervalued or overvalued.

Guidewire Cash And Equivalents vs. Return On Equity

Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.

Guidewire Software

Return On Equity

 = 

Net Income

Total Equity

 = 
-0.0048
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.
Cash or Cash Equivalents are the most liquid of all assets found on the company's balance sheet. It is used in calculating many of the firm's liquidity ratios and is a good indicator of the overall financial health of a company. Companies with a lot of cash are usually attractive takeover targets. Cash Equivalents are balance sheet items that are typically reported using currency printed on notes.

Guidewire Software

Cash

 = 

Bank Deposits

+

Liquidities

 = 
988.31 M
Cash equivalents represent current assets that are easily convertible to cash such as short term bonds, savings account, money market funds, or certificate of deposits (CDs). One of the important consideration companies make when classifying assets as cash equivalent is that investments they report on their balance sheets under current assets should have almost no risk of change in value over the next few months (usually three months).

Guidewire Cash And Equivalents Comparison

Guidewire Software is currently under evaluation in cash and equivalents category among its peers.

Guidewire Software Profitability Projections

The most important aspect of a successful company is its ability to generate a profit. For investors in Guidewire Software, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Guidewire Software will eventually generate negative long term returns. The profitability progress is the general direction of Guidewire Software's change in net profit over the period of time. It can combine multiple indicators of Guidewire Software, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Last ReportedProjected for Next Year
Accumulated Other Comprehensive Income-12.2 M-11.6 M
Operating Income-52.6 M-49.9 M
Income Before Tax-26.8 M-28.2 M
Total Other Income Expense Net25.7 M27 M
Net Loss-6.1 M-6.4 M
Income Tax Expense-20.7 M-19.7 M
Net Loss-100.7 M-95.6 M
Net Loss-6.1 M-6.4 M
Non Operating Income Net Other-15.4 M-14.6 M
Interest Income43.5 M45.7 M
Net Interest Income36.7 M38.6 M
Change To Netincome137.8 M76.4 M
Net Loss(0.07)(0.08)
Income Quality(32.07)(30.47)
Net Income Per E B T 0.23  0.24 

Guidewire Profitability Driver Comparison

Profitability drivers are factors that can directly affect your investment outlook on Guidewire Software. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Guidewire Software position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Guidewire Software's important profitability drivers and their relationship over time.

Use Guidewire Software in pair-trading

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Guidewire Software position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Guidewire Software will appreciate offsetting losses from the drop in the long position's value.

Guidewire Software Pair Trading

Guidewire Software Pair Trading Analysis

The ability to find closely correlated positions to Guidewire Software could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Guidewire Software when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Guidewire Software - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Guidewire Software to buy it.
The correlation of Guidewire Software is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Guidewire Software moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Guidewire Software moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Guidewire Software can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching

Use Investing Themes to Complement your Guidewire Software position

In addition to having Guidewire Software in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.

Did You Try This Idea?

Run Broad Sovereign ETFs Thematic Idea Now

Broad Sovereign ETFs
Broad Sovereign ETFs Theme
ETF themes focus on helping investors to gain exposure to a broad range of assets, diversify, and lower overall costs. The Broad Sovereign ETFs theme has 14 constituents at this time.
You can either use a buy-and-hold strategy to lock in the entire theme or actively trade it to take advantage of the short-term price volatility of individual constituents. Macroaxis can help you discover thousands of investment opportunities in different asset classes. In addition, you can partner with us for reliable portfolio optimization as you plan to utilize Broad Sovereign ETFs Theme or any other thematic opportunities.
View All  Next Launch
When determining whether Guidewire Software is a strong investment it is important to analyze Guidewire Software's competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact Guidewire Software's future performance. For an informed investment choice regarding Guidewire Stock, refer to the following important reports:
Check out Risk vs Return Analysis.
For information on how to trade Guidewire Stock refer to our How to Trade Guidewire Stock guide.
You can also try the Commodity Directory module to find actively traded commodities issued by global exchanges.
To fully project Guidewire Software's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Guidewire Software at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Guidewire Software's income statement, its balance sheet, and the statement of cash flows.
Potential Guidewire Software investors and stakeholders can use historical trends found within financial statements to determine how well the company is positioned for the future. Although Guidewire Software investors may work on each financial statement separately, they are all related. The changes in Guidewire Software's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Guidewire Software's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.