GUIDEWIRE SOFTWARE INC (NYSE:GWRE) Combines Technical Strength and High Growth Momentum

In the world of growth investing, combining technical strength with fundamental momentum can be a good approach for finding potential market leaders. One method that brings together these parts is Mark Minervini’s Trend Template, which focuses on stocks in strong uptrends, backed by solid price action, moving averages, and relative strength. When this technical structure is joined with a High Growth Momentum (HGM) screen, which looks at speeding up earnings, sales growth, and positive revisions, it helps find companies that are not only trending well but also showing fundamental quality. This two-part study seeks to find stocks set for lasting outperformance.

GUIDEWIRE SOFTWARE INC (NYSE:GWRE) appears as a candidate that fits this strategy, matching both the technical rules of the Minervini Trend Template and the growth numbers wanted by momentum investors.

Technical Strength and Trend Compliance

A main part of Minervini’s strategy is finding stocks in a clear Stage 2 uptrend, which needs meeting several technical conditions. GWRE shows strength across these important trend template rules:

• Price Above Key Moving Averages: The current price of $246.64 is trading above the 50-day SMA ($225.53), 150-day SMA ($214.68), and 200-day SMA ($208.02), confirming alignment with both short-term and long-term upward trends.
• Rising Moving Averages: The 200-day SMA has been moving upward, changing from $207.80 to $208.02, pointing to kept bullish momentum.
• Proximity to Highs: GWRE is trading within 10% of its 52-week high of $272.60, meeting the template’s need for stocks to be within 25% of their yearly peak, a signal of strong momentum.
• Relative Strength: With a relative strength ranking of 79.49, GWRE is doing better than nearly 80% of the market, highlighting its leader status, a focus in Minervini’s approach to picking market leaders.

These technical signs indicate GWRE is in a good uptrend with continued momentum, lowering downside risk and matching the trend-following ideas that Minervini supports for catching high-probability breakouts.

Fundamental Growth and Momentum

Beyond technicals, the High Growth Momentum screen focuses on speeding up financial performance. GWRE shows interesting growth across several important areas:

• Earnings Growth: EPS growth on a trailing twelve-month basis is at 98.51%, with recent quarterly growth of 35.48% year-over-year. This speeding up is important, as Minervini notes that earnings surprises and upward revisions often draw institutional interest.
• Revenue Expansion: Revenue growth stays solid at 22.64% TTM, with steady quarterly growth above 20%. Lasting sales growth is a sign of companies with scalable business models and pricing power.
• Estimate Revisions: Positive analyst feeling is clear, with next-year EPS estimates changed upward by 4.76% over the past three months, a key sign of future expectations getting better.
• Profitability Improvement: The profit margin for the last quarter was 14.57%, showing operational efficiency and the ability to turn revenue into earnings, another point Minervini notes for superperforming stocks.

These numbers not only meet the HGM rules but also show the fundamental quality that Minervini joins with technical strength to find stocks with possibility for continued outperformance.

Stage Analysis and Market Position

GWRE works in the competitive software industry, providing answers for the property and casualty insurance sector. Its steady revenue growth and margin growth suggest it is taking market share and gaining from industry tailwinds. The stock’s technical position, consolidating near highs with less volatility, indicates it may be building a base within its Stage 2 advance, offering a possible entry point on strength, matching Minervini’s focus on low-risk pivot points.

Technical Overview and Summary

According to ChartMill’s technical report, GWRE gets a perfect rating of 10/10, showing very good technical health. The stock is in a confirmed uptrend across short-term and long-term timeframes, with strong relative strength and bullish price action. It is now trading in the upper part of its 52-week range and showing a bull flag pattern, which often comes before more advances. Support levels are well-marked, with key zones near $246 and $218, giving logical areas for stop-loss placement. For a detailed technical study, readers can look at the full technical report here.

Exploring Further Opportunities

For investors interested in finding other stocks that meet similar technical and growth rules, the High Growth Momentum + Trend Template screen offers a picked list of candidates that bring together Minervini’s trend ideas with strong growth fundamentals.

Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice. Investors should conduct their own research and consider their risk tolerance before making any investment decisions.