A Look at Tyler Technologies’s Valuation Following New Municipal Client Rollout

Tyler Technologies (TYL) shared news of a recent rollout, as the city of Homestead, Florida, is now live with its Enterprise Permitting & Licensing platform following a seven-month deployment. This marks a strategic client addition and demonstrates expanding interest in Tyler’s municipal software.

See our latest analysis for Tyler Technologies.

While landing new municipal clients like Homestead signals ongoing momentum for Tyler Technologies, its share price has struggled this year, with a year-to-date share price return of -18.9%. Still, over the past three years, total shareholder return remains positive at 36%, showing the company’s potential for long-term growth despite current volatility.

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Against this backdrop of declining share prices and recent contract momentum, investors are left to wonder if Tyler Technologies is now undervalued or if the market has already factored in the company’s future growth prospects.

Most Popular Narrative: 28.3% Undervalued

Tyler Technologies’ last close of $465.96 sits well below the most widely followed narrative fair value of $649.83. This sharp difference highlights a debate about whether the market is too focused on short-term headwinds and missing the company’s longer-term SaaS potential.

Strong demand for cloud-based, secure, and integrated solutions is driving recurring revenue, market leadership, and higher contract values amid digital transformation and regulatory tailwinds. Strategic acquisitions, unified client experience, and AI-powered offerings are boosting customer penetration, premium pricing, and scalable margin improvements across Tyler's expanding addressable market.

Read the complete narrative.

Want to know what’s fueling this striking valuation gap? The narrative leans on unstoppable cloud migration, big-ticket contracts, and some bold future margin ambitions. Curious how these optimistic assumptions stack up against pressure on government budgets and evolving tech needs? The underlying numbers might challenge everything you think you know about public sector SaaS.

Result: Fair Value of $649.83 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, weakness in government budgets or slowed SaaS migrations could challenge Tyler Technologies’ projected growth and put pressure on its optimistic valuation case.

Find out about the key risks to this Tyler Technologies narrative.

Another View: What Do the Numbers Say?

While a narrative-driven price target looks optimistic, the hard numbers tell a different story. Tyler Technologies trades at a price-to-earnings ratio of 63.6x, which is far higher than the US Software industry (29.2x), the peer group (38.1x), and even its fair ratio of 34.3x. Such a wide gap signals meaningful valuation risk if market sentiment shifts.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Tyler Technologies Narrative

If you see things differently or want to dig deeper into the data, it only takes a few minutes to build your own perspective and narrative. Do it your way.

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding Tyler Technologies.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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