Critical Contrast: Guidewire Software (GWRE) and Ultimate Software Group (ULTI)
Guidewire Software (NYSE: GWRE) and Ultimate Software Group (NASDAQ:ULTI) are both mid-cap computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, earnings, valuation, risk and dividends.
This table compares Guidewire Software and Ultimate Software Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Ultimate Software Group||2.90%||6.24%||2.18%|
Guidewire Software has a beta of 1.04, suggesting that its share price is 4% more volatile than the S&P 500. Comparatively, Ultimate Software Group has a beta of 0.99, suggesting that its share price is 1% less volatile than the S&P 500.
Valuation & Earnings
This table compares Guidewire Software and Ultimate Software Group’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Guidewire Software||$514.28 million||13.60||$21.22 million||$0.40||232.03|
|Ultimate Software Group||$940.73 million||8.59||$14.05 million||$0.81||326.10|
Guidewire Software has higher earnings, but lower revenue than Ultimate Software Group. Guidewire Software is trading at a lower price-to-earnings ratio than Ultimate Software Group, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings and target prices for Guidewire Software and Ultimate Software Group, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Ultimate Software Group||1||4||15||0||2.70|
Guidewire Software currently has a consensus target price of $85.25, indicating a potential downside of 8.15%. Ultimate Software Group has a consensus target price of $253.35, indicating a potential downside of 4.08%. Given Ultimate Software Group’s higher probable upside, analysts plainly believe Ultimate Software Group is more favorable than Guidewire Software.
Ultimate Software Group beats Guidewire Software on 8 of the 12 factors compared between the two stocks.
Guidewire Software Company Profile
Guidewire Software, Inc. provides software products for property and casualty insurers. It offers Guidewire InsuranceNow, a cloud-based platform that offers policy, billing, and claims management functionality to insurers. The company's products include Guidewire InsuranceSuite comprising Guidewire PolicyCenter, an underwriting and policy administration application; Guidewire ClaimCenter, a lifecycle management application; Guidewire BillingCenter, manages billing, payment plans, agent commissions, and external payment systems; and Guidewire Underwriting Management, a cloud-based underwriting application. Its InsuranceSuite add-on applications consist of Guidewire Rating Management to manage the pricing of insurance products; Guidewire Reinsurance Management to use rules-based logic to execute reinsurance strategy through underwriting and claims processes; Guidewire Client Data Management to manage customer information; and Guidewire Product Content Management that provides software tools and standards-based line-of-business templates to introduce and modify insurance products. The company also provides data management and analytics products, such as Guidewire DataHub, a data store that unifies, standardizes, and stores data from insurer's systems and external sources; Guidewire InfoCenter that provides information for business intelligence, analysis, and enhanced decision making; Guidewire Live that aggregate data from internal and third-party sources, and analyze and visualize data; and Guidewire Predictive Analytics, a tool that allows insurers to make data-driven decisions. In addition, it offers Guidewire Digital Engagement Applications to provide digital experiences to customers, agents, vendors, and field personnel through their device of choice; and implementation and integration, maintenance support, and professional services, as well as Guidewire Production Services. The company was founded in 2001 and is headquartered in Foster City, California.
Ultimate Software Group Company Profile
The Ultimate Software Group, Inc. provides cloud-based human capital management solutions primarily to enterprise companies in the United States and Canada. The company's UltiPro software solution delivers the functionality businesses to manage the employee life cycle from recruitment to retirement. Its UltiPro solution includes unified feature sets for talent acquisition and onboarding, human resources (HR) management and compliance, benefits management and online enrollment, payroll, performance management, employee engagement surveying, compensation management with salary planning, budgeting, incentive award planning, succession management, learning management, reporting and analytical decision-making and predictive tools, and time capture, scheduling, attendance tracking, and absence accruals; and has role-based features for HR professionals, executives, managers, administrators, and employees. The company's UltiPro software solution is delivered through software-as-a-service. It also provides professional services, and customer support and product maintenance services. The company serves customers in various industries, including manufacturing, food services, sports, technology, finance, insurance, retail, real estate, transportation, communications, healthcare, and other services. The Ultimate Software Group, Inc. was founded in 1990 and is headquartered in Weston, Florida.
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