AFRM vs. GWRE: A Head-to-Head Stock Comparison
Updated onHere’s a clear look at AFRM and GWRE, comparing key factors like historical performance, profitability, financial strength, growth, dividend, and valuation.
Company Overview
AFRM’s market capitalization stands at 22.30 billion USD, while GWRE’s is 19.40 billion USD, indicating their market valuations are broadly comparable.
AFRM’s beta of 3.58 points to significantly higher volatility compared to GWRE (beta: 1.16), suggesting AFRM has greater potential for both gains and losses relative to market movements.
| Symbol | AFRM | GWRE |
|---|---|---|
| Company Name | Affirm Holdings, Inc. | Guidewire Software, Inc. |
| Country | US | US |
| Sector | Technology | Technology |
| Industry | Software - Infrastructure | Software - Application |
| CEO | Max Roth Levchin | Michael George Rosenbaum |
| Price | 69.19 USD | 230.38 USD |
| Market Cap | 22.30 billion USD | 19.40 billion USD |
| Beta | 3.58 | 1.16 |
| Exchange | NASDAQ | NYSE |
| IPO Date | January 13, 2021 | January 25, 2012 |
| ADR | No | No |
Historical Performance
This chart compares the performance of AFRM and GWRE by tracking the growth of an initial $10,000 investment in each. Use the tabs to select the desired time period.
Data is adjusted for dividends and splits.
Profitability
Return on Equity
AFRM
-2.22%
Software - Infrastructure Industry
- Max
- 80.61%
- Q3
- 29.97%
- Median
- 2.84%
- Q1
- -8.35%
- Min
- -56.26%
AFRM has a negative Return on Equity of -2.22%. This indicates the company is generating a loss for its shareholders, which can be a result of unprofitability or negative shareholder equity and is often a sign of financial distress.
GWRE
2.64%
Software - Application Industry
- Max
- 59.01%
- Q3
- 17.85%
- Median
- 4.73%
- Q1
- -10.56%
- Min
- -52.94%
GWRE’s Return on Equity of 2.64% is on par with the norm for the Software - Application industry, indicating its profitability relative to shareholder equity is typical for the sector.
Return on Invested Capital
AFRM
-0.85%
Software - Infrastructure Industry
- Max
- 39.31%
- Q3
- 11.97%
- Median
- 1.67%
- Q1
- -7.10%
- Min
- -34.29%
AFRM has a negative Return on Invested Capital of -0.85%. This indicates that its operations are failing to generate a profit on the total capital invested, signaling significant inefficiency or value destruction.
GWRE
0.44%
Software - Application Industry
- Max
- 35.07%
- Q3
- 9.72%
- Median
- 0.76%
- Q1
- -8.68%
- Min
- -34.12%
GWRE’s Return on Invested Capital of 0.44% is in line with the norm for the Software - Application industry, reflecting a standard level of efficiency in generating profits from its capital base.
Net Profit Margin
AFRM
-2.07%
Software - Infrastructure Industry
- Max
- 46.46%
- Q3
- 14.65%
- Median
- 2.66%
- Q1
- -7.70%
- Min
- -35.45%
AFRM has a negative Net Profit Margin of -2.07%, indicating the company is operating at a net loss as its expenses exceeded its revenues.
GWRE
4.10%
Software - Application Industry
- Max
- 48.14%
- Q3
- 16.07%
- Median
- 1.83%
- Q1
- -9.60%
- Min
- -45.64%
GWRE’s Net Profit Margin of 4.10% is aligned with the median group of its peers in the Software - Application industry. This indicates its ability to convert revenue into profit is typical for the sector.
Operating Profit Margin
AFRM
-2.53%
Software - Infrastructure Industry
- Max
- 48.51%
- Q3
- 16.56%
- Median
- 4.48%
- Q1
- -6.43%
- Min
- -40.18%
AFRM has a negative Operating Profit Margin of -2.53%. This signifies the company is unprofitable at the operational level, as its core business expenses exceed its revenue.
GWRE
2.05%
Software - Application Industry
- Max
- 51.67%
- Q3
- 15.35%
- Median
- 1.79%
- Q1
- -12.42%
- Min
- -45.17%
GWRE’s Operating Profit Margin of 2.05% is around the midpoint for the Software - Application industry, indicating that its efficiency in managing core business operations is typical for the sector.
Profitability at a Glance
| Symbol | AFRM | GWRE |
|---|---|---|
| Return on Equity (TTM) | -2.22% | 2.64% |
| Return on Assets (TTM) | -0.60% | 1.39% |
| Return on Invested Capital (TTM) | -0.85% | 0.44% |
| Net Profit Margin (TTM) | -2.07% | 4.10% |
| Operating Profit Margin (TTM) | -2.53% | 2.05% |
| Gross Profit Margin (TTM) | 71.61% | 62.09% |
Financial Strength
Current Ratio
AFRM
63.09
Software - Infrastructure Industry
- Max
- 3.80
- Q3
- 2.25
- Median
- 1.51
- Q1
- 1.10
- Min
- 0.23
AFRM’s Current Ratio of 63.09 is exceptionally high, placing it well outside the typical range for the Software - Infrastructure industry. This indicates a very strong liquidity position, though such a high ratio may also suggest that the company is not using its assets efficiently to generate profits.
GWRE
3.23
Software - Application Industry
- Max
- 5.09
- Q3
- 2.84
- Median
- 1.70
- Q1
- 1.12
- Min
- 0.04
GWRE’s Current Ratio of 3.23 is in the upper quartile for the Software - Application industry. This signifies a strong liquidity position, suggesting the company is well-equipped to cover its immediate liabilities compared to its peers.
Debt-to-Equity Ratio
AFRM
2.56
Software - Infrastructure Industry
- Max
- 2.56
- Q3
- 1.12
- Median
- 0.33
- Q1
- 0.05
- Min
- 0.00
AFRM’s leverage is in the upper quartile of the Software - Infrastructure industry, with a Debt-to-Equity Ratio of 2.56. While this approach can boost equity growth, it also exposes the company to greater financial vulnerability.
GWRE
0.52
Software - Application Industry
- Max
- 1.85
- Q3
- 0.77
- Median
- 0.18
- Q1
- 0.05
- Min
- 0.00
GWRE’s Debt-to-Equity Ratio of 0.52 is typical for the Software - Application industry, indicating its use of leverage is in line with the sector norm. This suggests a balanced approach to its capital structure.
Interest Coverage Ratio
AFRM
-0.24
Software - Infrastructure Industry
- Max
- 32.21
- Q3
- 5.24
- Median
- 0.95
- Q1
- -17.99
- Min
- -50.82
AFRM has a negative Interest Coverage Ratio of -0.24. This indicates that its earnings were insufficient to cover even its operational costs, let alone its interest payments, signaling significant financial distress.
GWRE
1.49
Software - Application Industry
- Max
- 39.23
- Q3
- 8.55
- Median
- 1.48
- Q1
- -14.59
- Min
- -39.97
GWRE’s Interest Coverage Ratio of 1.49 is positioned comfortably within the norm for the Software - Application industry, indicating a standard and healthy capacity to cover its interest payments.
Financial Strength at a Glance
| Symbol | AFRM | GWRE |
|---|---|---|
| Current Ratio (TTM) | 63.09 | 3.23 |
| Quick Ratio (TTM) | 63.09 | 3.23 |
| Debt-to-Equity Ratio (TTM) | 2.56 | 0.52 |
| Debt-to-Asset Ratio (TTM) | 0.71 | 0.28 |
| Net Debt-to-EBITDA Ratio (TTM) | 19.75 | 2.73 |
| Interest Coverage Ratio (TTM) | -0.24 | 1.49 |
Growth
The following charts compare key year-over-year (YoY) growth metrics for AFRM and GWRE. These metrics are based on the companies’ annual financial reports.
Revenue Growth
Earnings Per Share (EPS) Growth
Free Cash Flow Growth
Dividend
Dividend Yield
AFRM
0.00%
Software - Infrastructure Industry
- Max
- 4.07%
- Q3
- 0.00%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
AFRM currently does not pay a dividend, resulting in a yield of 0%. This is a common strategy for growth-focused companies that prioritize reinvesting earnings, though it may be less typical in mature, income-oriented sectors.
GWRE
0.00%
Software - Application Industry
- Max
- 3.66%
- Q3
- 0.00%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
GWRE currently does not pay a dividend, resulting in a yield of 0%. This is a common strategy for growth-focused companies that prioritize reinvesting earnings, though it may be less typical in mature, income-oriented sectors.
Dividend Payout Ratio
AFRM
0.00%
Software - Infrastructure Industry
- Max
- 48.68%
- Q3
- 0.00%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
AFRM has a Dividend Payout Ratio of 0%, indicating it does not currently pay a dividend. This is a common strategy for growth-oriented companies that reinvest all profits back into the business.
GWRE
0.00%
Software - Application Industry
- Max
- 81.09%
- Q3
- 0.00%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
GWRE has a Dividend Payout Ratio of 0%, indicating it does not currently pay a dividend. This is a common strategy for growth-oriented companies that reinvest all profits back into the business.
Dividend at a Glance
| Symbol | AFRM | GWRE |
|---|---|---|
| Dividend Yield (TTM) | 0.00% | 0.00% |
| Dividend Payout Ratio (TTM) | 0.00% | 0.00% |
Valuation
Price-to-Earnings Ratio
AFRM
-360.51
Software - Infrastructure Industry
- Max
- 107.77
- Q3
- 54.40
- Median
- 28.10
- Q1
- 18.03
- Min
- 5.32
AFRM has a negative P/E Ratio of -360.51. This occurs when a company has negative earnings (a net loss), making the ratio unsuitable for valuation analysis.
GWRE
559.41
Software - Application Industry
- Max
- 194.31
- Q3
- 98.56
- Median
- 51.87
- Q1
- 22.76
- Min
- 1.02
At 559.41, GWRE’s P/E Ratio is exceptionally high, exceeding the typical maximum for the Software - Application industry. This suggests the stock may be significantly overvalued compared to its peers and implies high market expectations that could be difficult to meet.
Forward P/E to Growth Ratio
AFRM
-6.16
Software - Infrastructure Industry
- Max
- 8.12
- Q3
- 3.94
- Median
- 2.13
- Q1
- 0.94
- Min
- 0.01
AFRM has a negative Forward PEG Ratio of -6.16. This typically results from negative earnings or forecasts of declining future earnings, making the ratio not meaningful for valuation.
GWRE
23.16
Software - Application Industry
- Max
- 15.44
- Q3
- 6.57
- Median
- 2.78
- Q1
- 0.55
- Min
- 0.00
GWRE’s Forward PEG Ratio of 23.16 is exceptionally high for the Software - Application industry. This suggests its stock price is very high relative to its expected earnings growth, signaling significant overvaluation risk.
Price-to-Sales Ratio
AFRM
7.42
Software - Infrastructure Industry
- Max
- 18.25
- Q3
- 9.05
- Median
- 4.77
- Q1
- 2.30
- Min
- 0.11
AFRM’s P/S Ratio of 7.42 aligns with the market consensus for the Software - Infrastructure industry. This suggests its valuation, based on sales, is seen as standard and is on par with its competitors.
GWRE
22.98
Software - Application Industry
- Max
- 23.49
- Q3
- 11.14
- Median
- 5.62
- Q1
- 2.84
- Min
- 0.33
GWRE’s P/S Ratio of 22.98 is in the upper echelon for the Software - Application industry. This means the company is valued richly on its revenue stream compared to its peers, suggesting the stock is priced for a high level of future performance.
Price-to-Book Ratio
AFRM
7.80
Software - Infrastructure Industry
- Max
- 19.94
- Q3
- 10.91
- Median
- 6.33
- Q1
- 2.95
- Min
- 0.51
The P/B Ratio is often not a primary valuation metric for the Software - Infrastructure industry.
GWRE
14.21
Software - Application Industry
- Max
- 21.03
- Q3
- 10.49
- Median
- 6.36
- Q1
- 2.89
- Min
- 0.12
The P/B Ratio is often not a primary valuation metric for the Software - Application industry.
Valuation at a Glance
| Symbol | AFRM | GWRE |
|---|---|---|
| Price-to-Earnings Ratio (P/E, TTM) | -360.51 | 559.41 |
| Forward PEG Ratio (TTM) | -6.16 | 23.16 |
| Price-to-Sales Ratio (P/S, TTM) | 7.42 | 22.98 |
| Price-to-Book Ratio (P/B, TTM) | 7.80 | 14.21 |
| Price-to-Free Cash Flow Ratio (P/FCF, TTM) | 36.63 | 81.22 |
| EV-to-EBITDA (TTM) | 93.06 | 272.69 |
| EV-to-Sales (TTM) | 9.41 | 23.22 |