Critical Contrast: Guidewire Software (NYSE:GWRE) vs. Cango (NYSE:CANG)

Cango (NYSE:CANG) and Guidewire Software (NYSE:GWRE) are both technology companies, but which is the better business? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, dividends and analyst recommendations.

Analyst Recommendations

This is a summary of current recommendations for Cango and Guidewire Software, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cango	1	1	1	1	2.50
Guidewire Software	0	4	12	0	2.75

Cango presently has a consensus price target of $30.00, indicating a potential upside of 1,263.64%. Guidewire Software has a consensus price target of $216.23, indicating a potential upside of 33.08%. Given Cango’s higher possible upside, research analysts plainly believe Cango is more favorable than Guidewire Software.

Profitability

This table compares Cango and Guidewire Software’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cango	-107.22%	-165.48%	-75.08%
Guidewire Software	9.44%	12.09%	6.70%

Volatility & Risk

Cango has a beta of 1.2, indicating that its share price is 20% more volatile than the S&P 500. Comparatively, Guidewire Software has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500.

Valuation and Earnings

This table compares Cango and Guidewire Software”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cango	$688.08 million	0.06	-$621.95 million	($23.79)	-0.09
Guidewire Software	$1.42 billion	9.52	$69.80 million	$1.63	99.68

Guidewire Software has higher revenue and earnings than Cango. Cango is trading at a lower price-to-earnings ratio than Guidewire Software, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

4.2% of Cango shares are owned by institutional investors. 29.1% of Cango shares are owned by company insiders. Comparatively, 0.5% of Guidewire Software shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Guidewire Software beats Cango on 10 of the 15 factors compared between the two stocks.

About Cango

Cango Inc. operates an automotive transaction service platform that connects dealers, original equipment manufacturers, financial institutions, car buyers, insurance brokers, and companies in the People's Republic of China. The company offers automobile trading solutions comprising car sourcing, transaction facilitation, logistics, and warehousing support for dealers through Cango Haoche app that offers new car transaction services, and Cango U-Car app that offers used-car transaction services. It also provides automotive financing facilitation services that include facilitating financing transactions from financial institutions to car buyers, which comprises credit origination, credit assessment, credit servicing, and delinquent asset management services; facilitating financing transactions of car purchases for car buyers; and after-market services to car buyers, which includes facilitating the sale of insurance policies from insurance brokers or companies. The company was founded in 2010 and is headquartered in Shanghai, the People's Republic of China.

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.