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GuruFocus has detected 4 Warning Signs with Guidewire Software Inc $GWRE.
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Guidewire Software Inc (NYSE:GWRE)
Median PS Value
USD 56.19 (As of Today)

This valuation method assumes that the stock valuation will revert to its historical mean in terms of Price/Sales Ratio. The reason we use P/S Ratio instead of P/E Ratio or P/B Ratio is because Price/Sales Ratio is independent of profit margin, and can be applied to a broader range of situations.

Median P/S Value is calculated as trailing twelve months (TTM) revenue per share times 10-Year median P/S ratio. Guidewire Software Inc's revenue per share for the trailing twelve months (TTM) ended in Jan. 2017 was USD 6.111. Guidewire Software Inc's 10-Year median P/S ratio is 9.20. Therefore, the Median P/S Value for today is USD 56.19.

As of today, Guidewire Software Inc's share price is USD 61.57. Guidewire Software Inc's median P/S value is USD 56.19. Therefore, Guidewire Software Inc's Price to Median P/S Value Ratio for today is 1.10.

GWRE' s Price-to-Median-PS-Value Range Over the Past 10 Years
Min: 0.2   Max: 1.2
Current: 1.1

0.2
1.2

During the past 8 years, the highest Price to Median P/S Value Ratio of Guidewire Software Inc was 1.20. The lowest was 0.20. And the median was 1.01.

GWRE's Price-to-Median-PS-Value is ranked higher than
64% of the 1498 Companies
in the Global Software - Infrastructure industry.

( Industry Median: 1.15 vs. GWRE: 1.10 )

Definition

Guidewire Software Inc's Median P/S Value for today is calculated as

Median P/S Value=Total Annual Sales / Shares Outstanding*10-Year Median P/S Ratio
=Revenue per Share (TTM)*10-Year Median P/S Ratio
=6.111*9.20
=56.22

10-Year Median P/S Ratio is 9.20.
Guidewire Software Inc's revenue per share for the trailing twelve months (TTM) ended in Jan. 2017 was 1.367 (Apr. 2016 ) + 1.914 (Jul. 2016 ) + 1.284 (Oct. 2016 ) + 1.546 (Jan. 2017 ) = USD 6.111.

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


Explanation

This valuation method assumes that the stock valuation will revert to its historical mean in terms of Price/Sales Ratio. The reason we use P/S Ratio instead of P/E Ratio or P/B Ratio is because Price/Sales Ratio is independent of profit margin, and can be applied to a broader range of situations.

It also assumes that over time the profit margin is constant. If a company increases its profit margin to a sustainable level, this value might under-estimate its value. If it has permanent declined profit margins, this may over-estimate the company’s value.

Guidewire Software Inc's Price to Median P/S Value Ratio for today is calculated as

Price to Median P/S Value=Share Price/Median P/S Value
=61.57/56.22
=1.10

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


Related Terms

P/E Ratio, P/B Ratio, P/S Ratio, Intrinsic Value (DCF Projected), Intrinsic Value (DCF), Intrinsic Value (DE), Graham Number, GAVA


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Guidewire Software Inc Annual Data

Jul09Jul10Jul11Jul12Jul13Jul14Jul15Jul16
medpsvalue 0.000.000.000.0072.6166.1545.7548.0349.1753.58

Guidewire Software Inc Quarterly Data

Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17
medpsvalue 48.1748.7648.8849.1749.2150.5951.9953.5854.7756.19
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