Guidewire Software (NYSE:GWRE – Get Free Report) and Cloudflare (NYSE:NET – Get Free Report) are both large-cap computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, dividends, risk, institutional ownership and valuation.
Volatility & Risk
Guidewire Software has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500. Comparatively, Cloudflare has a beta of 1.1, indicating that its stock price is 10% more volatile than the S&P 500.
Profitability
This table compares Guidewire Software and Cloudflare’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Guidewire Software | -1.11% | -1.19% | -0.74% |
| Cloudflare | -6.90% | -8.54% | -2.42% |
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Guidewire Software | $958.94 million | 12.42 | -$111.86 million | ($0.13) | -1,107.92 |
| Cloudflare | $1.48 billion | 18.03 | -$183.95 million | ($0.53) | -147.92 |
Guidewire Software has higher earnings, but lower revenue than Cloudflare. Guidewire Software is trading at a lower price-to-earnings ratio than Cloudflare, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
82.7% of Cloudflare shares are held by institutional investors. 0.4% of Guidewire Software shares are held by insiders. Comparatively, 12.8% of Cloudflare shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Analyst Recommendations
This is a breakdown of current recommendations and price targets for Guidewire Software and Cloudflare, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Guidewire Software | 1 | 1 | 11 | 0 | 2.77 |
| Cloudflare | 3 | 12 | 10 | 0 | 2.28 |
Guidewire Software currently has a consensus price target of $147.69, suggesting a potential upside of 2.54%. Cloudflare has a consensus price target of $92.29, suggesting a potential upside of 17.72%. Given Cloudflare’s higher probable upside, analysts clearly believe Cloudflare is more favorable than Guidewire Software.
Summary
Guidewire Software beats Cloudflare on 8 of the 14 factors compared between the two stocks.
About Guidewire Software
Guidewire Software, Inc. provides a platform for property and casualty (P&C) insurers worldwide. The company offers Guidewire InsuranceSuite Cloud, such as PolicyCenter Cloud, BillingCenter Cloud, and ClaimCenter Cloud applications. It also provides Guidewire InsuranceNow, a cloud-based platform that offers policy, billing, and claims management functionality to insurers; and Guidewire InsuranceSuite for Self-Managed. In addition, the company offers Guidewire Rating Management to manage the pricing of insurance products; and Guidewire Reinsurance Management to use rules-based logic to execute reinsurance strategy through underwriting and claims processes. Further, it provides Guidewire Underwriting Management, a cloud-based integrated business application; Guidewire AppReader, a submission intake management solution; Guidewire ClaimCenter Package for the London market supports the claims workflow used by London Market insurers and brokers; Guidewire Digital Engagement Applications, which enable insurers to provide digital experiences to customers, agents, vendors, and field personnel through their device of choice; and Guidewire for Salesforce to provide customer information regarding policies and claims. Additionally, the company offers Guidewire Predict, a P&C-specific machine-learning platform; Guidewire HazardHub that allows insurers to understand, assess, price, and manage property risk; Guidewire Canvas, Guidewire Compare, and Guidewire Explore cloud-native applications; and Guidewire Cyence, a cyber-risk economic modeling product. The company was incorporated in 2001 and is headquartered in San Mateo, California.
About Cloudflare
Cloudflare, Inc. operates as a cloud services provider that delivers a range of services to businesses worldwide. The company provides an integrated cloud-based security solution to secure a range of combination of platforms, including public cloud, private cloud, on-premise, software-as-a-service applications, and IoT devices; and website and application security products comprising web application firewall, bot management, distributed denial of service, API gateways, SSL/TLS encryption, script management, security center, and rate limiting products. It offers website and application performance solutions, including content delivery, load balancing, DNS, agro smart routing, video stream delivery, web optimization, cache reserve, cloudfare waiting room, and cloudfare data localization suite; SASE platform through cloudfare one that provides a cloud-based network-as-a-service; network services which deliver network connectivity, security, and performance, including magic WAN, magic transit, magic firewall, cloudflare network interconnect, and spectrum. In addition, the company provides zero trust services, such as cloudflare access, cloudflare gateway, remote browser isolation, cloud access security broker, cloud email security, and data loss prevention products that protects, inspects, and provides privilege rules to grant access to data and application. Further, it provides developer-based solutions consisting of cloudflare workers, R2 object storage, workers KV, durable objects, cloudfare pages, cloudfare stream, and cloudfare images; and consumer products comprising of 1.1.1.1, a DNS resolver, WARP, a virtual private network, and cloudfare registrar that secures registration and management of domain names. The company serves customers in the technology, healthcare, financial services, consumer and retail, industrial, and non-profit industries, as well as government. Cloudflare, Inc. was incorporated in 2009 and is headquartered in San Francisco, California.
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