Financial Analysis: Guidewire Software (GWRE) versus Oracle Corporation (ORCL)
Guidewire Software (NYSE: GWRE) and Oracle Corporation (NYSE:ORCL) are both mid-cap computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, valuation, earnings, analyst recommendations and dividends.
Risk and Volatility
Guidewire Software has a beta of 1.24, suggesting that its stock price is 24% more volatile than the S&P 500. Comparatively, Oracle Corporation has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500.
Institutional & Insider Ownership
58.7% of Oracle Corporation shares are owned by institutional investors. 1.0% of Guidewire Software shares are owned by insiders. Comparatively, 29.0% of Oracle Corporation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
This is a summary of current recommendations for Guidewire Software and Oracle Corporation, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Guidewire Software currently has a consensus target price of $77.29, indicating a potential downside of 2.19%. Oracle Corporation has a consensus target price of $51.98, indicating a potential downside of 1.50%. Given Oracle Corporation’s higher possible upside, analysts plainly believe Oracle Corporation is more favorable than Guidewire Software.
This table compares Guidewire Software and Oracle Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Oracle Corporation pays an annual dividend of $0.76 per share and has a dividend yield of 1.4%. Guidewire Software does not pay a dividend. Oracle Corporation pays out 34.5% of its earnings in the form of a dividend. Guidewire Software has increased its dividend for 5 consecutive years.
Earnings & Valuation
This table compares Guidewire Software and Oracle Corporation’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Guidewire Software||$514.28 million||11.43||$45.34 million||$0.28||282.21|
|Oracle Corporation||$37.73 billion||5.79||$14.67 billion||$2.20||23.99|
Oracle Corporation has higher revenue and earnings than Guidewire Software. Oracle Corporation is trading at a lower price-to-earnings ratio than Guidewire Software, indicating that it is currently the more affordable of the two stocks.
Oracle Corporation beats Guidewire Software on 11 of the 18 factors compared between the two stocks.
About Guidewire Software
Guidewire Software, Inc. is a provider of software products for property and casualty (P&C) insurers. The Company’s software serves as a technology platform for P&C insurance carriers. The Company’s InsurancePlatform consists of three elements: core transaction processing, data management and analytics, and digital engagement. The Company sells its products to a range of global P&C insurance carriers ranging from global insurers to national carriers to regional carriers. The Company’s core transaction processing includes Guidewire InsuranceSuite, Guidewire PolicyCenter, Guidewire ClaimCenter, Guidewire BillingCenter and InsuranceSuite Add-on Modules. The Company’s data management and analytics includes Guidewire DataHub, Guidewire InfoCenter, Guidewire Live and Guidewire Predictive Analytics. The Company’s digital engagement includes Guidewire Digital Portals.
About Oracle Corporation
Oracle Corporation (Oracle) provides products and services that address all aspects of corporate information technology (IT) environments, including application, platform and infrastructure. The Company’s businesses include cloud and on-premise software, hardware and services. Its cloud and on-premise software business consists of three segments, including cloud software and on-premise software, which includes Software as a Service (SaaS) and Platform as a Service (PaaS) offerings, cloud infrastructure as a service (IaaS) and software license updates and product support. Its hardware business consists of two segments, including hardware products and hardware support. The Company’s services business includes the remainder of the Company’s segments. Its services business includes activities, such as consulting services, enhanced support services and education services, among others.
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