Should You Consider Investing in Guidewire Software (GWRE)?

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Baron Funds, an asset management firm, published its “Baron Focused Growth Fund” first quarter 2022 investor letter – a copy of which can be downloaded here. Baron Focused Growth Fund (the “Fund”) declined 8.03% (Institutional Shares) in the quarter ended March 31, 2022. The Fund’s primary benchmark, the Russell 2500 Growth Index (the “Index”), fell 12.30% in the period. The S&P 500 Index, which measures the performance of large-cap companies, fell 4.60%. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.

In its Q1 2022 investor letter, Baron Focused Growth Fund mentioned Guidewire Software, Inc. (NYSE:GWRE) and explained its insights for the company. Founded in 2001, Guidewire Software, Inc. (NYSE:GWRE) is a San Mateo, California-based software company with a $6.1 billion market capitalization. Guidewire Software, Inc. (NYSE:GWRE) delivered a -35.02% return since the beginning of the year, while its 12-month returns are down by -34.56%. The stock closed at $73.77 per share on June 15, 2022.

Here is what Baron Focused Growth Fund has to say about Guidewire Software, Inc. (NYSE:GWRE) in its Q1 2022 investor letter:

“Shares of P&C insurance software vendor Guidewire fell due to multiple compression in high-growth cloud technology stocks. The company has crossed the midpoint of its cloud transition, which should correspond with dramatically improving financial results. We believe Guidewire has tripled its addressable market through new products and cloud delivery. We also believe Guidewire will be the critical software vendor for the global P&C insurance industry, capturing 30% to 50% of its $15 billion to $30 billion total addressable market and generating margins above 40%. This should lead to strong free cash flow which the company can use to continue to invest in its business and create new products and services for its customers.”

Photo by Austin Distel on Unsplash

Our calculations show that Guidewire Software, Inc. (NYSE:GWRE) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Guidewire Software, Inc. (NYSE:GWRE) was in 28 hedge fund portfolios at the end of the first quarter of 2022, compared to 27 funds in the previous quarter. Guidewire Software, Inc. (NYSE:GWRE) delivered a -15.63% return in the past 3 months.

In February 2022, we also shared another hedge fund’s views on Guidewire Software, Inc. (NYSE:GWRE) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

Disclosure: None. This article is originally published at Insider Monkey.