Docusign (NASDAQ:DOCU) & Guidewire Software (NYSE:GWRE) Critical Survey

Guidewire Software (NYSE:GWRE) and Docusign (NASDAQ:DOCU) are both large-cap technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, earnings, dividends, risk and valuation.

Institutional and Insider Ownership

77.6% of Docusign shares are held by institutional investors. 0.5% of Guidewire Software shares are held by company insiders. Comparatively, 0.6% of Docusign shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings for Guidewire Software and Docusign, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Guidewire Software	0	4	12	0	2.75
Docusign	1	14	3	0	2.11

Guidewire Software presently has a consensus price target of $216.23, suggesting a potential upside of 22.92%. Docusign has a consensus price target of $67.33, suggesting a potential downside of 13.14%. Given Guidewire Software’s stronger consensus rating and higher probable upside, analysts plainly believe Guidewire Software is more favorable than Docusign.

Volatility & Risk

Guidewire Software has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500. Comparatively, Docusign has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Guidewire Software	$1.48 billion	9.93	$139.28 million	$1.63	107.92
Docusign	$3.22 billion	4.50	$309.08 million	$1.64	47.27

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

	Net Margins	Return on Equity	Return on Assets
Guidewire Software	9.44%	12.66%	6.73%
Docusign	9.82%	18.29%	8.42%

Summary

Docusign beats Guidewire Software on 8 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 Docusign

Docusign, Inc. provides electronic signature solution in the United States and internationally. The company provides e-signature solution that enables sending and signing of agreements on various devices; Contract Lifecycle Management (CLM), which automates workflows across the entire agreement process; Document Generation streamlines the process of generating new, custom agreements; and Gen for Salesforce, which allows sales representatives to automatically generate agreements with a few clicks from within Salesforce. It also provides Identify, a signer-identification option for checking government-issued IDs; Standards-Based Signatures, which support signatures that involve digital certificates; Monitor that uses advanced analytics to track Docusign eSignature web, mobile, and API account; Notary which enables notaries public to conduct remote online notarization transactions; and Web Forms, a web forms that quickly draft agreements using pre-populated data from completed forms or external systems via APIs. In addition, the company offers Rooms for Real Estate that provides a way for brokers and agents to manage the entire real estate transaction digitally. Signature and CLM are FedRAMP, an authorized version of Docusign eSignature for U.S. federal government agencies; and life sciences modules that support compliance with the electronic signature practices. The company sells its products through direct and partner-assisted sales, and digital self-service purchasing. Docusign, Inc. was incorporated in 2003 and is headquartered in San Francisco, California.