Tyler Technologies Sees Surge in Stock Performance Amid Strong Earnings and SaaS Growth
Texas-based Tyler Technologies, Inc. (TYL), boasting a market capitalization of $27 billion, provides integrated information-management solutions tailored for the public sector. Its offerings cater to a variety of clients, including federal, state, and local agencies, school districts, and other government offices. The company’s software spans key areas such as Financial Management, Education, Courts and Justice, Public Safety, and Property Appraisal and Tax.
Impressive Stock Performance
Over the past year, shares of TYL have significantly outperformed the broader market. TYL has increased by 54.5%, whereas the S&P 500 Index ($SPX) has risen nearly 32.6% during the same period. In 2024 alone, TYL shares are up 50.5%, compared to a 26.5% gain for SPX on a year-to-date basis.
Stronger Than Peers
When comparing TYL to the SPDR S&P Software & Services ETF (XSW), Tyler Technologies has shown even more strength. The ETF has gained approximately 42.1% over the last year and experienced a 29.7% rise in 2024.
Growth Drivers: SaaS and Revenue Increase
Tyler Technologies’ remarkable market performance can be traced to robust software-as-a-service (SaaS) adoption, notable transaction revenue growth, and record-high free cash flow. The company’s growth is complemented by advancements in cloud efficiency initiatives, better margins in professional services, and rising annual recurring revenue from SaaS contracts. Their strategic approach, which includes effective cross-selling and a large number of client conversions from on-premises to cloud, has also significantly contributed to their success.
Recent Earnings Report
On October 23, TYL released its Q3 earnings, leading to a 5.1% jump in its stock the next trading day. Although TYL’s adjusted earnings per share (EPS) of $2.52 exceeded consensus expectations, its revenue of $543.3 million fell short of forecasts.
Future Earnings Outlook
For the fiscal year ending in December, analysts predict TYL’s EPS will rise by 26.9% to $7.36 on a diluted basis. The company has a strong history of earnings surprises, having beaten estimates in each of the last four quarters.
Analyst Ratings
Among the 16 analysts following TYL stock, the consensus rating is a “Strong Buy,” composed of 13 “Strong Buy” ratings, one “Moderate Buy,” and two “Holds.” This rating is slightly down from the previous month, where 14 analysts had a “Strong Buy” recommendation.
Price Target Insights
On October 25, Barclays PLC (BCS) raised its price target for Tyler Technologies to $705, maintaining an “Overweight” rating. This target is the highest among Wall Street analysts, increased from $700 after TYL’s solid Q3 results and improved fiscal 2024 margin guidance of 21%-23%. Barclays believes these factors build a promising foundation for fiscal 2025.
Currently, TYL’s average price target of $670.69 suggests a potential upside of 6.6% from present market prices.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please refer to the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
