Constellation Software (OTCMKTS:CNSWF – Get Free Report) and Guidewire Software (NYSE:GWRE – Get Free Report) are both large-cap computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, analyst recommendations, valuation, dividends, risk and profitability.
Analyst Ratings
This is a summary of recent ratings and recommmendations for Constellation Software and Guidewire Software, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Constellation Software | 1 | 1 | 5 | 0 | 2.57 |
| Guidewire Software | 1 | 3 | 11 | 1 | 2.75 |
Guidewire Software has a consensus target price of $249.85, indicating a potential upside of 98.57%. Given Guidewire Software’s stronger consensus rating and higher possible upside, analysts plainly believe Guidewire Software is more favorable than Constellation Software.
Risk and Volatility
Valuation and Earnings
This table compares Constellation Software and Guidewire Software”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Constellation Software | $11.62 billion | 3.28 | $512.00 million | $23.18 | 77.61 |
| Guidewire Software | $1.34 billion | 7.94 | $69.80 million | $2.20 | 57.19 |
Constellation Software has higher revenue and earnings than Guidewire Software. Guidewire Software is trading at a lower price-to-earnings ratio than Constellation Software, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Constellation Software and Guidewire Software’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Constellation Software | 4.22% | 48.18% | 12.82% |
| Guidewire Software | 14.11% | 13.44% | 7.48% |
Summary
Constellation Software beats Guidewire Software on 7 of the 13 factors compared between the two stocks.
About Constellation Software
Constellation Software Inc., together with its subsidiaries, acquires, builds, and manages vertical market software businesses in Canada, the United States, Europe, and internationally. It provides mission critical software solutions for public and private sector markets. The company is also involved in the software licensing; and sale of third-party hardware. In addition, it offers professional, and maintenance and other recurring services. Constellation Software Inc. was incorporated in 1995 and is headquartered in Toronto, Canada.
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.
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