Analyzing Guidewire Software (NYSE:GWRE) and Kingsoft Cloud (NASDAQ:KC)

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

Valuation & Earnings

This table compares Guidewire Software and Kingsoft Cloud”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Guidewire Software	$1.20 billion	7.58	$69.80 million	$1.85	59.16
Kingsoft Cloud	$1.37 billion	2.13	-$133.88 million	($0.47)	-20.49

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

Analyst Ratings

This is a summary of recent ratings for Guidewire Software and Kingsoft Cloud, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Guidewire Software	0	3	11	0	2.79
Kingsoft Cloud	1	1	4	0	2.50

Guidewire Software currently has a consensus price target of $229.00, indicating a potential upside of 109.23%. Kingsoft Cloud has a consensus price target of $18.53, indicating a potential upside of 92.45%. Given Guidewire Software’s stronger consensus rating and higher possible upside, equities analysts clearly believe Guidewire Software is more favorable than Kingsoft Cloud.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Guidewire Software	11.25%	12.62%	6.93%
Kingsoft Cloud	-9.38%	-11.67%	-3.59%

Insider and Institutional Ownership

13.4% of Kingsoft Cloud shares are held by institutional investors. 0.5% of Guidewire Software shares are held by insiders. Comparatively, 14.2% of Kingsoft Cloud shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk & Volatility

Guidewire Software has a beta of 0.93, suggesting that its share price is 7% less volatile than the S&P 500. Comparatively, Kingsoft Cloud has a beta of 1.94, suggesting that its share price is 94% more volatile than the S&P 500.

Summary

Guidewire Software beats Kingsoft Cloud on 10 of the 14 factors compared between the two stocks.

About Guidewire Software

Guidewire Software, Inc. provides a platform for property and casualty (P&C) insurers worldwide. The company offers Guidewire InsuranceSuite Cloud, such as PolicyCenter Cloud, BillingCenter Cloud, and ClaimCenter Cloud applications. It also provides Guidewire InsuranceNow, a cloud-based platform that offers policy, billing, and claims management functionality to insurers; and Guidewire InsuranceSuite for Self-Managed. In addition, the company offers Guidewire Rating Management to manage the pricing of insurance products; and Guidewire Reinsurance Management to use rules-based logic to execute reinsurance strategy through underwriting and claims processes. Further, it provides Guidewire Underwriting Management, a cloud-based integrated business application; Guidewire AppReader, a submission intake management solution; Guidewire ClaimCenter Package for the London market supports the claims workflow used by London Market insurers and brokers; Guidewire Digital Engagement Applications, which enable insurers to provide digital experiences to customers, agents, vendors, and field personnel through their device of choice; and Guidewire for Salesforce to provide customer information regarding policies and claims. Additionally, the company offers Guidewire Predict, a P&C-specific machine-learning platform; Guidewire HazardHub that allows insurers to understand, assess, price, and manage property risk; Guidewire Canvas, Guidewire Compare, and Guidewire Explore cloud-native applications; and Guidewire Cyence, a cyber-risk economic modeling product. The company was incorporated in 2001 and is headquartered in San Mateo, California.

About Kingsoft Cloud

Kingsoft Cloud Holdings Limited provides cloud services to businesses and organizations primarily in China. The company's products portfolio includes cloud products, including infrastructure as a service (IaaS) infrastructure, platform as a service (PaaS) middleware, and software as a service (SaaS) applications that primarily consist of cloud computing, network, database, big data, security, storage, and delivery solutions. It offers research and development services, as well as enterprise digital solutions and related services. The company also provides public cloud services to customers in various verticals, including video, e-commerce, intelligent mobility, artificial intelligence, and mobile internet; and enterprise cloud services to customers in financial services, public service, and healthcare businesses. Kingsoft Cloud Holdings Limited was incorporated in 2012 and is headquartered in Beijing, the People's Republic of China.