Is Guidewire Software, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Guidewire Software, Inc. moved from expensive to fair. The company is currently fairly valued based on its financial metrics. Key ratios include a P/E ratio of 241, a Price to Book Value of 15.80, and an EV to EBITDA of 329.55. In comparison, peers such as Block, Inc. have a P/E of 12.44, while Broadridge Financial Solutions, Inc. has a P/E of 46.07, indicating that Guidewire's valuation is significantly higher than these competitors.
Despite its high valuation ratios, Guidewire has demonstrated strong performance, with a year-to-date return of 44.90% compared to the S&P 500's 13.30%, and a three-year return of 332.81% against the S&P 500's 81.19%. This performance suggests that the market has confidence in Guidewire's growth potential, reinforcing its fair valuation status.