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Texas-based Tyler Technologies, Inc. (TYL), with a market capitalization of $27 billion, specializes in integrated information-management solutions for the public sector, serving federal, state, and local agencies, school districts, and government offices. Its software solutions span Financial Management, Education, Courts and Justice, Public Safety, Property Appraisal and Tax, and more.
Shares of TYL have outperformed the broader market over the past year. TYL has gained 54.5% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 32.6%. In 2024, TYL shares are up 50.5%, while SPX shares are up 26.5% on a YTD basis.
Narrowing the focus, TYL has outperformed the SPDR S&P Software & Services ETF (XSW). The exchange-traded fund has gained about 42.1% over the past year and a 29.7% rise in 2024.
Tyler Technologies has surpassed market performance, fueled by strong SaaS adoption, significant transaction revenue growth, and record-high free cash flow. Its market success is further supported by accelerating cloud efficiency initiatives, enhanced professional services margins, and rising annual recurring revenue from SaaS contracts. The company's effective go-to-market strategy, including successful cross-selling efforts and a surge in on-premises-to-cloud client conversions, has been a key driver of its impressive growth.
On Oct. 23, TYL reported its Q3 earnings, and its shares jumped 5.1% in the following trading session. While its adjusted EPS of $2.52 surpassed the consensus estimate, its revenue of $543.3 million missed the Street forecasts.
For the current fiscal year, ending in December, analysts expect TYL’s EPS to grow 26.9% to $7.36 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 16 analysts covering TYL stock, the consensus rating is a “Strong Buy.” That’s based on 13 “Strong Buy” ratings, one “Moderate Buys,” and two “Holds.”
This configuration is slightly less bullish than a month ago, with 14 suggesting a “Strong Buy.”
On Oct. 25, Barclays PLC (BCS) increased its price target for Tyler Technologies to $705, maintaining an "Overweight" rating. This target, the highest on Wall Street, was increased from $700, following the company’s strong Q3 results and its raised fiscal 2024 margin guidance of 21%-23%. The firm noted that these factors lay a solid foundation for fiscal 2025.
TYL’s mean price target of $670.69 represents a premium of 6.6% from the current market prices.
