ServiceNow (NYSE: NOW) and Guidewire Software (NYSE:GWRE) are both mid-cap computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, analyst recommendations, risk, valuation, institutional ownership, profitability and dividends.

Risk & Volatility

ServiceNow has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500. Comparatively, Guidewire Software has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500.

Earnings & Valuation

This table compares ServiceNow and Guidewire Software’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
ServiceNow $1.63 billion 12.50 -$32.17 million ($0.99) -120.58
Guidewire Software $514.28 million 11.30 $47.34 million $0.28 276.68

Guidewire Software has higher revenue, but lower earnings than ServiceNow. ServiceNow 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 ServiceNow and Guidewire Software’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ServiceNow -10.17% -29.05% -5.39%
Guidewire Software 4.13% 3.59% 3.04%

Analyst Recommendations

This is a summary of recent ratings for ServiceNow and Guidewire Software, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ServiceNow 0 6 23 2 2.87
Guidewire Software 0 3 6 1 2.80

ServiceNow presently has a consensus price target of $118.92, indicating a potential downside of 0.39%. Guidewire Software has a consensus price target of $79.57, indicating a potential upside of 2.71%. Given Guidewire Software’s higher probable upside, analysts clearly believe Guidewire Software is more favorable than ServiceNow.

Summary

Guidewire Software beats ServiceNow on 6 of the 11 factors compared between the two stocks.

About ServiceNow

ServiceNow, Inc. is provider of enterprise cloud computing solutions that define, structure, manage and automate services for global enterprises. The Company offers a set of cloud-based services that automate workflow within and between departments in an enterprise. It provides workflow solutions, and focuses on service management for customer support, human resources, security operations and other enterprise departments. The platform also enables customers to create, by themselves or with its partners, their own service-oriented business applications throughout the enterprise. The Company delivers its software through the Internet as a service. It markets its services to enterprises in a range of industries, including financial services, consumer products, information technology services, healthcare, government, education and technology. It operates data centers in Australia, Brazil, Canada, Hong Kong, the Netherlands, Singapore, Switzerland, the United Kingdom and the United States.

About Guidewire Software

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.

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