Reviewing Fastly (NYSE:FSLY) and Guidewire Software (NYSE:GWRE)

Fastly (NYSE:FSLY) and Guidewire Software (NYSE:GWRE) are both computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, profitability, risk, analyst recommendations, dividends and institutional ownership.

Institutional & Insider Ownership

79.7% of Fastly shares are owned by institutional investors. 6.7% of Fastly shares are owned by insiders. Comparatively, 0.5% of Guidewire Software shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations for Fastly and Guidewire Software, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fastly	1	6	2	0	2.11
Guidewire Software	1	4	12	0	2.65

Fastly currently has a consensus price target of $10.64, indicating a potential upside of 24.93%. Guidewire Software has a consensus price target of $266.64, indicating a potential upside of 109.34%. Given Guidewire Software’s stronger consensus rating and higher possible upside, analysts plainly believe Guidewire Software is more favorable than Fastly.

Valuation and Earnings

This table compares Fastly and Guidewire Software”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fastly	$591.99 million	2.15	-$158.06 million	($0.96)	-8.87
Guidewire Software	$1.20 billion	9.01	$69.80 million	$1.05	121.31

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

Volatility & Risk

Fastly has a beta of 1.03, suggesting that its share price is 3% more volatile than the S&P 500. Comparatively, Guidewire Software has a beta of 1.06, suggesting that its share price is 6% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Fastly	-23.49%	-12.02%	-7.83%
Guidewire Software	7.23%	10.15%	5.49%

Summary

Guidewire Software beats Fastly on 12 of the 14 factors compared between the two stocks.

About Fastly

Fastly, Inc. operates an edge cloud platform for processing, serving, and securing its customer's applications in the United States, the Asia Pacific, Europe, and internationally. The edge cloud is a category of Infrastructure as a Service that enables developers to build, secure, and deliver digital experiences at the edge of the internet. The company offers network services to speed up and optimize the delivery of web and application traffic; device detection and geolocation; content delivery network, such as dynamic site acceleration, origin shield, instant purge, surrogate keys, programmatic control, content compression, reliability features, fanout, domainr, privacy, and modern protocols and performance services; and video/ streaming solutions and services, including live streaming, video on demand, and media shield. It also provides security solutions, such as DDoS protection, next-gen WAF, bot management, API and ATO protection, advanced rate limiting, and compliance services; load balancing; image optimization; transport layer security (TLS), platform TLS, and certainly; and origin connect. It serves customers operating in digital publishing, media and entertainment, technology, online education, travel and hospitality, and financial services industries. The company was formerly known as SkyCache, Inc. and changed its name to Fastly, Inc. in May 2012. Fastly, Inc. was incorporated in 2011 and is headquartered in San Francisco, California.

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.