Head-To-Head Survey: Guidewire Software (NYSE:GWRE) and Luxoft Holding (LXFT)

Guidewire Software (NYSE: GWRE) and Luxoft Holding (NYSE:LXFT) are both computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, risk, valuation, dividends, profitabiliy, analyst recommendations and institutional ownership.

Institutional & Insider Ownership

95.4% of Luxoft Holding shares are owned by institutional investors. 1.0% of Guidewire Software shares are owned 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 ratings and price targets for Guidewire Software and Luxoft Holding, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Guidewire Software 0 3 4 1 2.75
Luxoft Holding 0 3 3 0 2.50

Guidewire Software presently has a consensus price target of $74.50, indicating a potential upside of 5.23%. Luxoft Holding has a consensus price target of $67.50, indicating a potential upside of 10.66%. Given Luxoft Holding’s higher possible upside, analysts plainly believe Luxoft Holding is more favorable than Guidewire Software.

Volatility & Risk

Guidewire Software has a beta of 1.27, meaning that its stock price is 27% more volatile than the S&P 500. Comparatively, Luxoft Holding has a beta of 1.46, meaning that its stock price is 46% more volatile than the S&P 500.

Valuation and Earnings

This table compares Guidewire Software and Luxoft Holding’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Guidewire Software $474.36 million 11.10 $25.35 million $0.14 505.71
Luxoft Holding $785.56 million 1.72 $96.86 million $1.85 32.97

Luxoft Holding has higher revenue and earnings than Guidewire Software. Luxoft Holding is trading at a lower price-to-earnings ratio than Guidewire Software, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Guidewire Software and Luxoft Holding’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Guidewire Software 2.19% 1.97% 1.69%
Luxoft Holding 7.97% 21.06% 15.59%

Summary

Luxoft Holding beats Guidewire Software on 9 of the 15 factors compared between the two stocks.

Guidewire Software Company Profile

Guidewire Software, Inc. is a provider of software products for property and casualty (P&C) insurers. The Company’s software serves as a technology platform for P&C insurance carriers. The Company’s InsurancePlatform consists of three elements: core transaction processing, data management and analytics, and digital engagement. The Company sells its products to a range of global P&C insurance carriers ranging from global insurers to national carriers to regional carriers. The Company’s core transaction processing includes Guidewire InsuranceSuite, Guidewire PolicyCenter, Guidewire ClaimCenter, Guidewire BillingCenter and InsuranceSuite Add-on Modules. The Company’s data management and analytics includes Guidewire DataHub, Guidewire InfoCenter, Guidewire Live and Guidewire Predictive Analytics. The Company’s digital engagement includes Guidewire Digital Portals.

Luxoft Holding Company Profile

Luxoft Holding, Inc., is a provider of software development services and information technology (IT) solutions to a global client base consisting primarily of large multinational corporations. The Company’s software development services consist of custom software development and support, product engineering and testing, and technology consulting. The Company’s solutions are based on its proprietary products and platforms that directly impact its clients’ business outcomes and efficiently deliver continuous innovation. The Company develops its solutions and delivers its services from 34 cities with delivery centers worldwide. Its products and platforms include Horizon, SuperCloud, Twister, iStockTrack, TEORA, Populus, AllView, CVNAR and Retail Engagement Suite (RES) in Internet of Things (IoT) space.

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