Guidewire Software: Valuation And Growth Finally Match (Rating Upgrade)

Guidewire Software, Inc. reported strong growth in Q2, and raised the FY2026 guidance for the second time already. GWRE's signings continue to boost ARR. Revenue growth remains very accretive to margins, even though outperformance on financial metrics is even expected to cause a margin headwind in H2 due to bonus accruals. I now estimate GWRE stock to have 16% upside to $196. The stock's valuation finally matches its growth.