MeritValue

Guidewire Software, Inc.

GWREdata completeness 88%16 fiscal years on file
The thesis, from the filings

Guidewire Software, Inc. earns about -4% on invested capital, below its ~9% cost of capital, but has diluted owners by 3% over 5 years — no moat visible in the numbers. The estimate methods put fair value between $80 and $139.6 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$743.3M1$812.6M2$905.3M3$980.5M3$1.2B3
Net income−$66.5M4−$180.4M5−$111.9M6−$6.1M6$69.8M6
Operating cash flow$111.6M7−$37.9M8$38.4M9$195.7M9$300.9M9
Capital expenditure$19M10$9.51M11$5.82M12$6.36M12$5.74M12
Free cash flow (derived)$92.6M7−$47.5M8$32.6M9$189.4M9$295.1M9
Total debt$343.8M13$358.2M14$397.2M15$398.9M15—
Cash & equivalents$384.9M16$606.3M17$401.8M18$548M19$697.9M19
Diluted shares83.6M83.6M82.2M82.3M85.9M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$169.62
your share of equity
Profit it earned you last year
$8.13
Free cash flow it threw off
$34.35
Debt you’d be carrying
—

10 shares is a claim on $169.62 of net worth that earned you $8.13 and generated $34.35 of cash last year.

iii. Is this a good business?
Moat signal · return on invested capital
-4% avg · 5y
FY21 -4%FY22 -14%FY23 -8%FY24 -1%FY25 8%

It earned about -4% on invested capital against a ~9% cost of capital — below the cost of funding. The numbers show no moat.

seeing a moat in the numbers →
Management signal · capital allocation
+3% shares · 5y

Share count is up 3% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has risen 16% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 2 estimate methods that apply put fair value between $80 and $139.6 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$139.6
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth20.0%
  • fcfBase$189.4M
DCF · Growth Exit 5Y
$80
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth20.0%
  • fcfBase$189.4M
Earnings Power Value
not applicable
normalized (5y-median) earnings non-positive — EPV undefined
Graham Number
$17.58
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years20.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $80
The three cases
Bear0.0%$39.62
Base20.0%$80
Bull20.0%$80

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 20.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-07-31 · accession 0001528396-23-000089 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-07-31 · accession 0001528396-24-000105 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-07-31 · accession 0001528396-25-000221 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-07-31 · accession 0001528396-23-000089 (ProfitLoss)
  5. 10-K · period ending 2022-07-31 · accession 0001528396-24-000105 (ProfitLoss)
  6. 10-K · period ending 2023-07-31 · accession 0001528396-25-000221 (ProfitLoss)
  7. 10-K · period ending 2021-07-31 · accession 0001528396-23-000089 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-07-31 · accession 0001528396-24-000105 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-07-31 · accession 0001528396-25-000221 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-07-31 · accession 0001528396-23-000089 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-07-31 · accession 0001528396-24-000105 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-07-31 · accession 0001528396-25-000221 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-07-31 · accession 0001528396-22-000106 (LongTermDebt)
  14. 10-K · period ending 2022-07-31 · accession 0001528396-23-000089 (LongTermDebt)
  15. 10-K · period ending 2023-07-31 · accession 0001528396-24-000105 (LongTermDebt)
  16. 10-K · period ending 2021-07-31 · accession 0001528396-22-000106 (CashAndCashEquivalentsAtCarryingValue)
  17. 10-K · period ending 2022-07-31 · accession 0001528396-23-000089 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2023-07-31 · accession 0001528396-24-000105 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2024-07-31 · accession 0001528396-25-000221 (CashAndCashEquivalentsAtCarryingValue)