Tyler Technologies (NYSE:TYL) - Share price, News & Analysis

Q: What is the Fair Price of TYL when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

TYL ($347.5) is trading above our estimate of [[fair value]] ($305.76)

TYL fundamental analysis
Snowflake Score
Valuation	1/6
Future Growth	3/6
Past Performance	4/6
Financial Health	4/6
Dividends	0/6

TYL Stock Overview

Tyler Technologies, Inc. provides integrated information management solutions and services for the public sector.

Rewards

Earnings are forecast to grow 16.36% per year

Earnings grew by 14.8% over the past year

Analysts in good agreement that stock price will rise by 36.1%

Risk Analysis

Significant insider selling over the past 3 months

Tyler Technologies Competitors

Paylocity Holding

NasdaqGS:PCTY

US$13.4b

PTC

NasdaqGS:PTC

US$12.3b

Paycom Software

NYSE:PAYC

US$19.1b

ANSYS

NasdaqGS:ANSS

US$19.3b

Price History & Performance

Summary of all time highs, changes and price drops for Tyler Technologies
Historical stock prices
Current Share Price	US$347.50
52 Week High	US$557.55
52 Week Low	US$300.85
Beta	0.91
1 Month Change	-4.45%
3 Month Change	4.08%
1 Year Change	-25.16%
3 Year Change	32.49%
5 Year Change	95.82%
Change since IPO	3,871.43%

Recent News & Updates

Oct 02

At US$348, Is It Time To Put Tyler Technologies, Inc. (NYSE:TYL) On Your Watch List?

Today we're going to take a look at the well-established Tyler Technologies, Inc. ( NYSE:TYL ). The company's stock...

Sep 20

Tyler Technologies extends contract for digital govt, payment solutions in Vermont

Tyler Technologies (NYSE:TYL) said Tuesday Vermont extended its contract for digital govt. and payments services for three years. The extension builds on the existing 16-year relationship with TYL unit NIC. NIC Vermont currently provides over 150 services and 120 websites to the state, including its payment processing platform. In 2021, the payment processing platform processed over $55M on behalf of Vermont.

Sep 01

Does Tyler Technologies (NYSE:TYL) Have A Healthy Balance Sheet?

Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility...

Aug 23

Tyler Technologies: Risk Far Outweighs The Reward

Tyler is a play on the government IT spending. The company has been in business for long, with profitability at the PAT and FCF levels. Despite the strength in the business model of the company, we think Tyler's valuation across multiple metrics warrants a correction. Tyler (TYL) is a cash-generative machine with no dividend policy. The company's mid-teen revenue growth and profitability make it an attractive stock; however, the price has increased significantly to justify valuations. We expect the stock could correct by as much as 50% and thus might be prudent to exit it. Business model Tyler Technologies, Inc. provides information technology solutions to the public sector, focusing on enhancing basic services for citizens. The company has software and service offerings, which can be subscription-based or service oriented. At the end of June 2022, the company had nearly 7,150 employees. Tyler is headquartered in Texas, US. Market Per Gartner estimates, government software spending is expected to grow quite nicely. Gartner, Inc., a leading information technology research and advisory company, estimates @that state and local government application and vertical-specific software spending will grow from $23.6 billion in 2022 to $32.3 billion in 2025. The professional services and support segments of the market are expected to expand from $32.0 billion in 2022 to $38.4billion in 2025. Application and vertical-specific software sales in the primary and secondary education segments of the market is expected to expand from$4.9 billion in 2022 to $6.0billion in 2025while professional services and support are expected to grow from $5.1 billion in 2022 to $6.3 billion in 2025. For the national and international government markets, application and vertical-specific software sales is expected to expand from $38.5 billion in 2022 to $53.8 billion in 2025while professional services and support are expected to grow from $63.1 billion in 2022 to $74.4 billion in 2025. Source: Tyler's 10K - 2021 Tyler competes with enterprise software providers such as Oracle, SAP, and other specialized solutions providers such as Accenture etc. The software solutions and migration market is becoming increasingly commoditized with differentiation stemming from domain expertise and customer relationships. Tyler has showcased both and the company is one of the oldest players in property appraisal services since 1938. Segments The company operates in nine major areas: 1. Financial management and education2. Courts and justice3. Public safety4. Planning, regulatory and maintenance5. Land and vital records management6. Data and insights 7. Platform technologies 8. Property appraisal and tax, and 9. NIC digital government and payments Tyler reports its financials in three segments: The Enterprise Software (or ES) segment houses software and services revenue for offerings 1 to 7 above The Appraisal and Tax (or A&T) division offer technology and services to automate the appraisal of the property, records management and associated services. NIC is a new division and offers payment solutions. Company filings Company filings The gross margin decline was primarily due to increased amortization expenses related to acquired software from acquisitions. Financials Tyler is FCF positive and generated ~$340 mn in free cash flow or a little over 21% of revenue. During its Q2 2022 earnings call, the management provided the following guidance for 2022: Revenue: $1.835-1.87 billion (versus $1.592 or up 16.4% at the mid-point) Non-GAAP EPS: $7.36 to $7.52 (versus $7.02 or up 6% at the mid-point) Consensus expectations for revenue are $1.87 and $2.09 billion for 2022 and 2023, respectively. Non-GAAP EPS expectations are $7.47 and $8.12. At around 22% FCF margin, based on consensus expectations, Tyler could be expected to generate $410 mn in FCF for 2022 and $460 mn in 2023. Valuation Tyler is an established, profitable, cash flow-positive software company, expected to grow at double digits. It can thus be valued through P/S, P/E and P/FCF.

Shareholder Returns

	TYL	US Software	US Market
7D	1.9%	-1.3%	-2.5%
1Y	-25.2%	-33.3%	-23.2%

Return vs Industry: TYL exceeded the US Software industry which returned -33.2% over the past year.

Return vs Market: TYL underperformed the US Market which returned -23.2% over the past year.

Price Volatility

Is TYL's price volatile compared to industry and market?
TYL volatility
TYL Average Weekly Movement	4.7%
Software Industry Average Movement	8.7%
Market Average Movement	6.8%
10% most volatile stocks in US Market	15.5%
10% least volatile stocks in US Market	2.8%

Stable Share Price: TYL is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: TYL's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1966	7,143	H. Moore	https://www.tylertech.com

Tyler Technologies, Inc. provides integrated information management solutions and services for the public sector. The company operates in three segments: Enterprise Software; Appraisal and Tax; and NIC. It offers financial management solutions, including modular fund accounting systems for government agencies or not-for-profit entities; utility billing systems for the billing and collection of metered and non-metered services; products to automate city and county functions, such as municipal courts, parking tickets, equipment and project costing, animal and business licenses, permits and inspections, code enforcement, citizen complaint tracking, ambulance billing, fleet maintenance, and cemetery records management; and student information and transportation solutions for K-12 schools.

Tyler Technologies Fundamentals Summary

How do Tyler Technologies's earnings and revenue compare to its market cap?
TYL fundamental statistics
Market Cap	US$14.45b
Earnings (TTM)	US$178.88m
Revenue (TTM)	US$1.82b

80.8x

P/E Ratio

7.9x

P/S Ratio

Is TYL overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
TYL income statement (TTM)
Revenue	US$1.82b
Cost of Revenue	US$1.05b
Gross Profit	US$769.24m
Other Expenses	US$590.36m
Earnings	US$178.88m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	4.30
Gross Margin	42.31%
Net Profit Margin	9.84%
Debt/Equity Ratio	51.4%

How did TYL perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

Is TYL undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

1/6

Valuation Score 1/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for TYL?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for TYL. This is calculated by dividing TYL's market cap by their current preferred multiple.
What is TYL's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$14.45b

TYL key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	8.5x
Enterprise Value/EBITDA	45.3x
PEG Ratio	4.9x

Price to Earnings Ratio vs Peers

How does TYL's PE Ratio compare to its peers?

TYL PE Ratio vs Peers

The above table shows the PE ratio for TYL vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	74.4x
PCTY Paylocity Holding	147.1x	22.4%	US$13.4b
PTC PTC	24.6x	16.3%	US$12.3b
PAYC Paycom Software	83.6x	24.1%	US$19.1b
ANSS ANSYS	42.1x	14.5%	US$19.3b
TYL Tyler Technologies	80.8x	16.4%	US$14.4b

Price-To-Earnings vs Peers: TYL is expensive based on its Price-To-Earnings Ratio (80.8x) compared to the peer average (74.4x).

Price to Earnings Ratio vs Industry

How does TYL's PE Ratio compare vs other companies in the US Software Industry?

Price-To-Earnings vs Industry: TYL is expensive based on its Price-To-Earnings Ratio (80.8x) compared to the US Software industry average (39.2x)

Price to Earnings Ratio vs Fair Ratio

What is TYL's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

TYL PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	80.8x
Fair PE Ratio	35.6x

Price-To-Earnings vs Fair Ratio: TYL is expensive based on its Price-To-Earnings Ratio (80.8x) compared to the estimated Fair Price-To-Earnings Ratio (35.6x).

Share Price vs Fair Value

What is the Fair Price of TYL when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: TYL ($347.5) is trading above our estimate of fair value ($305.76)

Significantly Below Fair Value: TYL is trading above our estimate of fair value.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

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Future Growth

How is Tyler Technologies forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

16.4%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: TYL's forecast earnings growth (16.4% per year) is above the savings rate (1.9%).

Earnings vs Market: TYL's earnings (16.4% per year) are forecast to grow faster than the US market (14.8% per year).

High Growth Earnings: TYL's earnings are forecast to grow, but not significantly.

Revenue vs Market: TYL's revenue (9.4% per year) is forecast to grow faster than the US market (7.7% per year).

High Growth Revenue: TYL's revenue (9.4% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if TYL's Return on Equity is forecast to be high in 3 years time

Discover growth companies

Past Performance

How has Tyler Technologies performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

3.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: TYL has high quality earnings.

Growing Profit Margin: TYL's current net profit margins (9.8%) are lower than last year (12.3%).

Past Earnings Growth Analysis

Earnings Trend: TYL's earnings have grown by 3% per year over the past 5 years.

Accelerating Growth: TYL's earnings growth over the past year (14.8%) exceeds its 5-year average (3% per year).

Earnings vs Industry: TYL earnings growth over the past year (14.8%) exceeded the Software industry 13.4%.

Return on Equity

High ROE: TYL's Return on Equity (7.3%) is considered low.

Discover strong past performing companies

Financial Health

How is Tyler Technologies's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: TYL's short term assets ($957.3M) exceed its short term liabilities ($833.9M).

Long Term Liabilities: TYL's short term assets ($957.3M) do not cover its long term liabilities ($1.5B).

Debt to Equity History and Analysis

Debt Level: TYL's net debt to equity ratio (39.7%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if TYL's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: TYL's debt is well covered by operating cash flow (35.7%).

Interest Coverage: TYL's interest payments on its debt are well covered by EBIT (11.4x coverage).

Balance Sheet

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Dividend

What is Tyler Technologies's current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

Dividend Yield vs Market

Tyler Technologies Dividend Yield vs Market

How does Tyler Technologies dividend yield compare to the market?
Segment	Dividend Yield
Company (Tyler Technologies)	n/a
Market Bottom 25% (US)	1.7%
Market Top 25% (US)	4.7%
Industry Average (Software)	1.1%
Analyst forecast in 3 Years (Tyler Technologies)	0%

Notable Dividend: Unable to evaluate TYL's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate TYL's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if TYL's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if TYL's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as TYL has not reported any payouts.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

4.5yrs

Average management tenure

CEO

H. Moore (54 yo)

5.42yrs

Tenure

US$5,590,005

Compensation

Mr. H. Lynn Moore, Jr., has been President of Tyler Technologies, Inc. since January 2017 and has been its Chief Executive Officer since May 10, 2018. Mr. Moore served as Executive Vice President at Tyler...

CEO Compensation Analysis

H. Moore's Compensation vs Tyler Technologies Earnings

How has H. Moore's remuneration changed compared to Tyler Technologies's earnings?
Date	Total Comp.	Salary	Company Earnings
Jun 30 2022	n/a	n/a	US$179m
Mar 31 2022	n/a	n/a	US$164m
Dec 31 2021	US$6m	US$525k	US$161m
Sep 30 2021	n/a	n/a	US$161m
Jun 30 2021	n/a	n/a	US$156m
Mar 31 2021	n/a	n/a	US$184m
Dec 31 2020	US$5m	US$525k	US$195m
Sep 30 2020	n/a	n/a	US$188m
Jun 30 2020	n/a	n/a	US$189m
Mar 31 2020	n/a	n/a	US$167m
Dec 31 2019	US$4m	US$515k	US$147m
Sep 30 2019	n/a	n/a	US$131m
Jun 30 2019	n/a	n/a	US$130m
Mar 31 2019	n/a	n/a	US$137m
Dec 31 2018	US$20m	US$500k	US$147m
Sep 30 2018	n/a	n/a	US$182m
Jun 30 2018	n/a	n/a	US$182m
Mar 31 2018	n/a	n/a	US$175m
Dec 31 2017	US$4m	US$425k	US$170m
Sep 30 2017	n/a	n/a	US$135m
Jun 30 2017	n/a	n/a	US$131m
Mar 31 2017	n/a	n/a	US$124m
Dec 31 2016	US$2m	US$339k	US$114m
Sep 30 2016	n/a	n/a	US$87m
Jun 30 2016	n/a	n/a	US$72m
Mar 31 2016	n/a	n/a	US$66m
Dec 31 2015	US$2m	US$323k	US$65m

Compensation vs Market: H.'s total compensation ($USD5.59M) is below average for companies of similar size in the US market ($USD13.04M).

Compensation vs Earnings: H.'s compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: TYL's management team is considered experienced (4.5 years average tenure).

Board Members

Experienced Board: TYL's board of directors are considered experienced (7.4 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: TYL insiders have only sold shares in the past 3 months.

Recent Insider Transactions

NYSE:TYL Recent Insider Transactions by Companies or Individuals
Date	Value	Name	Entity	Shares	Max Price
24 Aug 22	SellUS$306,956	Jeffrey Puckett	Individual	787	US$390.03
19 Aug 22	SellUS$325,260	Jeffrey Puckett	Individual	813	US$400.07
08 Jun 22	SellUS$2,182,470	John Marr	Individual	6,000	US$363.75
27 May 22	SellUS$545,819	Brian Miller	Individual	1,500	US$363.88
19 May 22	SellUS$158,044	Brian Miller	Individual	457	US$345.83
13 May 22	SellUS$897,431	Brian Miller	Individual	2,500	US$358.97
03 Nov 21	SellUS$5,902,810	John Marr	Individual	10,923	US$540.40

Ownership Breakdown

What is the ownership structure of TYL?
Owner Type	Number of Shares	Ownership Percentage
State or Government	17,966	0.04%
Individual Insiders	397,230	1.0%
General Public	3,123,591	7.5%
Institutions	38,042,686	91.5%

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Top Shareholders

Top 25 shareholders own 61.42% of the company

Ownership	Name	Shares	Current Value	Change %	Portfolio %
11.21%	The Vanguard Group, Inc.	4,662,653	$1.6b	1.3%	0.04%
8.24%	BlackRock, Inc.	3,427,895	$1.2b	-19.88%	0.03%
3.7%	State Street Global Advisors, Inc.	1,537,497	$534.3m	-8.44%	0.03%
3.52%	Principal Global Investors, LLC	1,464,034	$508.8m	-17.34%	0.36%
3.48%	AllianceBernstein L.P.	1,447,311	$502.9m	56.64%	0.21%
3.19%	Stichting Pensioenfonds ABP	1,327,276	$461.2m	-17.77%	0.66%
2.73%	Brown Capital Management, LLC	1,135,593	$394.6m	-2.42%	4.29%
2.44%	Capital Research and Management Company	1,014,729	$352.6m	-1.87%	0.02%
2.37%	Ownership Capital B.V.	987,074	$343.0m	4.32%	6.01%
2.03%	Geode Capital Management, LLC	844,393	$293.4m	3.58%	0.04%
1.79%	Janus Henderson Group plc	743,582	$258.4m	14.28%	0.15%
1.76%	Franklin Resources, Inc.	731,363	$254.1m	-0.24%	0.11%
1.49%	Massachusetts Financial Services Company	618,581	$215.0m	13.7%	0.06%
1.43%	Artisan Partners Limited Partnership	592,995	$206.1m	-4.63%	0.21%
1.36%	Invesco Ltd.	566,253	$196.8m	16.83%	0.07%
1.22%	Eagle Asset Management, Inc.	509,132	$176.9m	15.31%	1.13%
1.17%	Holocene Advisors, LP	488,089	$169.6m	47.66%	1.07%
1.16%	Van Eck Associates Corporation	483,237	$167.9m	21.55%	0.35%
1.13%	Echo Street Capital Management, LLC	471,768	$163.9m	8.86%	1.51%
1.06%	Macquarie Investment Management Business Trust	442,569	$153.8m	7.78%	0.17%
1.04%	Northern Trust Global Investments	431,808	$150.1m	-8.54%	0.03%
1%	Neuberger Berman Investment Advisers LLC	416,099	$144.6m	-4.83%	0.15%
0.99%	William Blair Investment Management, LLC	410,927	$142.8m	-0.92%	0.27%
0.97%	Eaton Vance Management	401,922	$139.7m	7.72%	0.05%
0.92%	BNY Mellon Asset Management	383,650	$133.3m	5.29%	0.03%

Ticker	Exchange	Primary Security	Security Type	Country	Currency	Listed on
TYL	NYSE (New York Stock Exchange)	Yes	Common Stock	US	USD	Feb 1969
TYP	DB (Deutsche Boerse AG)	Yes	Common Stock	DE	EUR	Feb 1969
TYL *	BMV (Bolsa Mexicana de Valores)	Yes	Common Stock	MX	MXN	Feb 1969
T2YL34	BOVESPA (Bolsa de Valores de Sao Paulo)		BDR EACH 60 REPR 1 COM	BR	BRL	Jan 2022

Data	Last Updated (UTC time)
Company Analysis	2022/10/02 00:00
End of Day Share Price	2022/09/30 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31