BofA Downgrades Guidewire Software - Read Why

October 4, 2021 12:08 PM | 1 min read | Make a Comment

BofA analyst Brad Sills downgraded Guidewire Software Inc GWRE to Underperform from Neutral with a price target of $125, down from $132, implying an 11% upside.
While Sills said the company outlined "healthy progress" with its cloud transition at its analyst day last week, shares are currently trading at a growth-adjusted multiple in line with the small-to-mid cap software peers. He believes a "best-case scenario" for ARR growth is high teens, which he views unlikely to drive multiple material expansion.
Sills also notes that Duck Creek (DCT) software revenue growth is estimated to be 37% in FY21, outpacing Guidewire, leading him to believe that the risk/reward is "more attractive in other software stocks."
Price Action: GWRE shares traded lower by 4.96% at $112.60 on the last check Monday.