Medidata Solutions (NASDAQ:MDSO) and Guidewire Software (NYSE:GWRE) are both mid-cap medical companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, profitability, earnings, dividends, institutional ownership, analyst recommendations and risk.
Institutional & Insider Ownership
96.0% of Medidata Solutions shares are held by institutional investors. 4.7% of Medidata Solutions shares are held by insiders. Comparatively, 0.7% of Guidewire Software shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
This table compares Medidata Solutions and Guidewire Software’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Earnings & Valuation
This table compares Medidata Solutions and Guidewire Software’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Medidata Solutions||$635.70 million||8.99||$51.92 million||$0.96||95.31|
|Guidewire Software||$661.07 million||11.73||-$26.74 million||$0.09||1,052.78|
Medidata Solutions has higher earnings, but lower revenue than Guidewire Software. Medidata Solutions is trading at a lower price-to-earnings ratio than Guidewire Software, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current ratings and target prices for Medidata Solutions and Guidewire Software, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Medidata Solutions currently has a consensus target price of $84.43, indicating a potential downside of 7.73%. Guidewire Software has a consensus target price of $108.00, indicating a potential upside of 13.98%. Given Guidewire Software’s stronger consensus rating and higher probable upside, analysts clearly believe Guidewire Software is more favorable than Medidata Solutions.
Volatility & Risk
Medidata Solutions has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500. Comparatively, Guidewire Software has a beta of 1.18, meaning that its stock price is 18% more volatile than the S&P 500.
About Medidata Solutions
Medidata Solutions, Inc. provides cloud-based solutions for life sciences worldwide. It offers the Medidata Clinical Cloud, a platform, pioneering analytics, and clinical technology for the development and commercialization of new therapies. The company's platform solutions include data capture and management, and trial planning and management. It also provides professional services, such as implementation, sponsor enablement, strategic consulting, partner support, and e-learning and training. The company markets and sells its cloud-based solutions through a direct sales force and through relationships with channel and strategic partners. It serves pharmaceutical, biotechnology, medical device, and diagnostics companies; academic research centers, government, and other non-profit organizations; and other non-profit organizations; and contract research organizations and other entities engaged in clinical trials. The company was founded in 1999 and is headquartered in New York, New York.
About Guidewire Software
Guidewire Software, Inc. provides software products for property and casualty insurers worldwide. The company offers Guidewire InsuranceSuite comprising Guidewire PolicyCenter, BillingCenter, and ClaimCenter applications. It also provides Guidewire InsuranceNow, a cloud-based platform, which offers policy, billing, and claims management functionality to insurers that prefer to subscribe to a cloud-based solution. In addition, the company offers Guidewire Underwriting Management, a cloud-based integrated business application; Guidewire Rating Management to manage the pricing of insurance products; Guidewire Reinsurance Management to use rules-based logic to execute reinsurance strategy through underwriting and claims processes; and Guidewire Client Data Management to enable customer information management. Further, it provides Guidewire Product Content Management that offers software tools and standards-based line-of-business templates to introduce and modify products; Guidewire AppReader, a submission intake management solution; and Guidewire London Market Messaging that provides a message-processing and action framework. Additionally, the company offers data management and analytics products, such as Guidewire DataHub, an operational data store; Guidewire InfoCenter, a business intelligence warehouse; Guidewire Live Analytics, a cloud analytics platform; Guidewire Predictive Analytics, a cloud-based tool; and Guidewire Cyence Risk Analytics, a cloud-native economic cyber risk modeling solution, as well as Digital Engagement Applications, which enable insurers to provide digital experiences to customers, agents, vendors, and field personnel through their device of choice. It also provides implementation and integration, maintenance support, and professional services, as well as Guidewire Production Services. The company was founded in 2001 and is headquartered in Foster City, California.
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