It’s common for many investors, especially those who are inexperienced, to buy shares in companies with a good story even if these companies are loss-making. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.
So if this idea of high risk and high reward doesn’t suit, you might be more interested in profitable, growing companies, like Guidewire Software (NYSE:GWRE). While this doesn’t necessarily speak to whether it’s undervalued, the profitability of the business is enough to warrant some appreciation – especially if its growing.
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How Fast Is Guidewire Software Growing Its Earnings Per Share?
In the last three years Guidewire Software’s earnings per share took off; so much so that it’s a bit disingenuous to use these figures to try and deduce long term estimates. As a result, we’ll zoom in on growth over the last year, instead. Outstandingly, Guidewire Software’s EPS shot from US$0.36 to US$1.08, over the last year. Year on year growth of 197% is certainly a sight to behold.
It’s often helpful to take a look at earnings before interest and tax (EBIT) margins, as well as revenue growth, to get another take on the quality of the company’s growth. The good news is that Guidewire Software is growing revenues, and EBIT margins improved by 7.4 percentage points to 5.1%, over the last year. Ticking those two boxes is a good sign of growth, in our book.
In the chart below, you can see how the company has grown earnings and revenue, over time. For finer detail, click on the image.
NYSE:GWRE Earnings and Revenue History December 8th 2025
Fortunately, we’ve got access to analyst forecasts of Guidewire Software’s future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.
Are Guidewire Software Insiders Aligned With All Shareholders?
Owing to the size of Guidewire Software, we wouldn’t expect insiders to hold a significant proportion of the company. But we are reassured by the fact they have invested in the company. Given insiders own a significant chunk of shares, currently valued at US$88m, they have plenty of motivation to push the business to succeed. That’s certainly enough to let shareholders know that management will be very focussed on long term growth.
Does Guidewire Software Deserve A Spot On Your Watchlist?
Guidewire Software’s earnings per share growth have been climbing higher at an appreciable rate. That EPS growth certainly is attention grabbing, and the large insider ownership only serves to further stoke our interest. The hope is, of course, that the strong growth marks a fundamental improvement in the business economics. So based on this quick analysis, we do think it’s worth considering Guidewire Software for a spot on your watchlist. We don’t want to rain on the parade too much, but we did also find 1 warning sign for Guidewire Software that you need to be mindful of.
There’s always the possibility of doing well buying stocks that are not growing earnings and do not have insiders buying shares. But for those who consider these important metrics, we encourage you to check out companies that do have those features. You can access a tailored list of companies which have demonstrated growth backed by significant insider holdings.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
