Insurance industry software maker Guidewire is the IBD Stock of the Day, having forged a new double-bottom base with its relative strength line at new highs. Guidewire stock has gained 17% in 2025, outperforming many software companies.
Guidewire shares were trying to move above the company's 50-day moving average on Wednesday. On the stock market today, Guidewire stock gained 2.2% to close at 193.89 amid a broad rally tied to the latest news on Trump administration trade tariffs.
Meanwhile, the iShares Expanded Tech Software exchange traded fund — composed of many of the major enterprise software players — is down 9% in 2025.
"Against the backdrop of heightened trade restrictions, we see Guidewire as best positioned to outperform software peers due to strong product position, pricing model that captures inflation, and relatively favorable end-market dynamics," Oppenheimer analyst Ken Wong said in a recent note to clients.
He added: "Management expects minimal direct headwinds with insurance core systems the definition of mission critical, and limited new logo driven growth."
The double-bottom base looks sort of like the letter W. It features two distinct sell-offs. Having formed a double-bottom base, Guidewire stock holds an entry point of 201, according to MarketSurge.
Most Guidewire customers are in the property and casualty insurance field. Guidewire's software handles insurance processing — underwriting, billings, claims management and risk management.
Guidewire Stock Benefits From Cloud Growth
It has shifted from on-premises software licensing to a cloud-computing platform. Guidewire's cloud products run on Amazon Web Services, part of the Amazon.com infrastructure.
Software makers typically recognize on-premises license fee revenue up front when contracts are signed. Subscription-based cloud revenue is recognized over time.
Founded in 2001, San Mateo, Calif.-based Guidewire competes with Duck Creek Technologies, Majesco, Insurity, Sapiens International and others. It became a public company in 2012.
Guidewire offers two property and casualty core platforms: cloud-based InsuranceSuite and InsuranceNow. Guidewire Chief Executive Mike Rosenbaum took the helm in 2019. He was formerly at Salesforce.
"Over the last two decades, Guidewire has generated an impressive roster of Tier 1 and 2 insurance carrier customers by replacing legacy and custom- built applications with next-generation automation software applications," D.A. Davidson analyst Peter Heckmann said in a recent note. "Guidewire now counts approximately 570 of the approximate 2,000 global P&C insurance carriers as customers."
Aside from the U.S., Guidewire sells software in Canada, Europe and Asia.
Guidewire fiscal third-quarter earnings are due in early June. Analysts predict adjusted earnings of 46 cents a share, up 78% from a year earlier, with revenue climbing 19% to $286.3 million.
Amid market volatility, investors may want to be cautious ahead of the report. One strategy around earnings would be to use call options. That approach would let investors cap their possible loss while still letting them participate in any post-earnings upside.
Guidewire Technical Ratings
Guidewire stock holds an IBD Composite Rating of 93 out of a best-possible 99, according to IBD Stock Checkup.
IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. Also, the best growth stocks have a Composite Rating of 90 or better.
Further, Guidewire stock has an Accumulation/Distribution Rating of D. That rating analyzes price and volume changes in a stock over the past 13 weeks of trading. Its current rating indicates more funds are buying than selling.
The rating, on an A+ to E scale, measures institutional buying and selling in a stock. A+ signifies heavy institutional buying, E means heavy selling. Think of the C grade as neutral.
Meanwhile, the average true range, or ATR metric available on IBD's MarketSurge charting tool offers some guidance amid market volatility. It gauges the characteristic breadth of a stock's behavior.
Stocks that tend to make large jumps or dives in daily action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more incremental moves have lower ATRs.
In the current, unpredictable market, IBD generally suggests stocks with 21-day ATRs of 3% or below. Guidewire stock's ATR is 4.36%. But many stocks are much higher.
Follow Reinhardt Krause on X, formerly Twitter, @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
