Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Guidewire Software as such a stock due to the following factors:
- GWRE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $25.5 million.
- GWRE traded 82,050 shares today in the pre-market hours as of 8:15 AM, representing 15.5% of its average daily volume.
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More details on GWRE:
Guidewire Software, Inc. provides system software to the property and casualty (P&C) insurance industry primarily in the United States, Canada, Australia, the United Kingdom, and internationally. GWRE has a PE ratio of 77.8. Currently there are 3 analysts that rate Guidewire Software a buy, no analysts rate it a sell, and 1 rates it a hold.
The average volume for Guidewire Software has been 435,300 shares per day over the past 30 days. Guidewire Software has a market cap of $2.8 billion and is part of the technology sector and computer software & services industry. Shares are up 62.3% year to date as of the close of trading on Friday.
rates Guidewire Software as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, premium valuation and feeble growth in the company's earnings per share.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 5.7%. Since the same quarter one year prior, revenues rose by 43.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- GWRE has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 2.64, which clearly demonstrates the ability to cover short-term cash needs.
- Powered by its strong earnings growth of 216.66% and other important driving factors, this stock has surged by 62.38% over the past year, outperforming the rise in the S&P 500 Index during the same period. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Software industry and the overall market, GUIDEWIRE SOFTWARE INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- You can view the full Guidewire Software Ratings Report.