Tyler Technologies (TYL): Evaluating Valuation After a Notable Three-Month Share Decline

Tyler Technologies (TYL) shares have been on a downward trend over the past three months, declining roughly 18%. This follows a period of outsized growth in prior years, and now the software company faces a more challenging environment.

See our latest analysis for Tyler Technologies.

Over the past year, Tyler Technologies’ share price has steadily lost ground alongside several high-profile software firms, with a 1-year total shareholder return of -21%. That pullback comes despite a solid multi-year run; its 3-year total return still sits at an impressive 65%. Momentum is clearly fading now as the latest quarter’s dip adds to investor caution around the stock’s valuation and growth pace.

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With shares still well below analyst price targets and healthy financial growth, investors now face the big question: is Tyler Technologies being overlooked, or is the recent weakness simply a sign that all the future upside is already priced in?

Most Popular Narrative: 28.3% Undervalued

With Tyler Technologies trading at $476.26, the most widely followed narrative places fair value sharply higher, highlighting a compelling gap to the market price. This setup suggests investors are significantly discounting the company’s prospective growth and profitability.

Ongoing investment in AI-powered tools and automation, evident in product launches like the AI-driven Resident Assistant and enhanced budgeting solutions, caters to public sector labor challenges and the need for data-driven decision-making. This enables premium pricing, reduces customer churn, and unlocks scalable margin improvements over time.

Read the complete narrative.

Curious why high-margin expansion and bold tech bets have analysts so bullish? The real surprise comes from the projected leaps in both top-line growth and profit margins. See exactly which aggressive assumptions fuel this upside view—key financial levers may catch investors off guard.

Result: Fair Value of $664.06 (UNDERVALUED)

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

However, persistent reliance on government budgets and unpredictable deal cycles may limit Tyler Technologies’ long-term earnings visibility and growth momentum.

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

Another View: Multiples Tell a Cautionary Tale

While some see Tyler Technologies as undervalued based on projected growth, the market’s go-to gauge tells a different story. Its price-to-earnings ratio stands at 65x, far above both the US Software industry average of 34.1x and the fair ratio of 35.1x. This premium could mean that the market is already pricing in a lot of future growth. What happens if reality falls short?

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 into the numbers firsthand, you can build your own analysis and perspective in just minutes using the tools available. Do it your way

A good starting point is our analysis highlighting 3 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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