10Y annualized return is
excellent
at 16.0% per year
TYL has met or exceeded earnings expectations in
the majority of
recent quarters (8/10)
Strong Return on Equity
Healthy Profit Margins
Strong Liquidity Ratios
Low Debt Levels
🏆 Strong SaaS Growth
🔐 High Recurring Revenue
💵 High Free Cash Flow
🚀 Robust Growth Strategy
🌐 Market Position and Demand
🤖 AI Integration
High Price-to-Earnings Ratio
Elevated Price-to-Sales Ratio
High Operating Cash Flow Ratio
Low Cash Ratio
📉 Dependence on Legacy Revenue Streams
Overall, Tyler Technologies demonstrates strong business quality with significant SaaS growth and robust recurring revenue. Their future prospects are promising, driven by strategic initiatives, a strong market demand, and an innovative approach to integrating AI. However, the transition from legacy revenue streams poses challenges in the short term, necessitating careful management.
Analysis Date: February 13, 2025
Last Updated: March 12, 2025
Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
Tyler Technologies, Inc. is a company that creates software to help government agencies and schools manage their daily operations more efficiently. They offer tools for things like handling budgets, managing city permits, tracking court cases, and billing for utilities. In simple terms, their products help public organizations run smoothly and serve their communities better. Founded in 1966 and based in Texas, Tyler Technologies focuses on providing solutions that make it easier for these entities to do their important work.
Streams of revenue
Geographic Distribution
Estimations for reference only
Core Products
Business Type
Business to Government
Competitive Advantages
Key Business Risks
Latest News
Evaluate the expected performance of Tyler Technologies (TYL) for the quarter ended March 2025, looking beyond the conventional Wall Street top-and-bo...
TYL's Q1 results are likely to reflect benefits from robust demand for SaaS solutions as the public sector shifts from on-premise to cloud-based syste...
PLANO, Texas--(BUSINESS WIRE)---- $TYL #TylerTech--Tyler published its 2024 corporate responsibility report, including corporate governance achievemen...
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$166.64
Current Market Price: $541.29
IV/P Ratio: 0.31x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
-225.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for TYL
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (87.71)
P/B ratio ≤ 1.5 (4.45)
Current ratio ≥ 2.0 (1.35x)
Long-term debt < Net current assets (1.68x)
Margin of safety (-225.0%)
TYL does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
8.71%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-30)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
42.28%
Higher values indicate better efficiency in production
TTM (as of 2025-04-30)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
12.30%
Higher values indicate better overall profitability
TTM (as of 2025-04-30)
The company's gross profit margin is 42.28%, indicating strong profitability at the product level. Additionally, the net profit margin of 12.30% shows effective cost management and profitability.
The price-to-free-cash-flow (P/FCF) ratio of 45.93 suggests that the stock is highly priced relative to its cash generation capabilities, which may indicate overvaluation.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.12x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
1.35x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
With a current ratio of 1.35 and a quick ratio of 1.35, the company demonstrates good short-term liquidity, indicating it can comfortably cover its short-term obligations.
The debt-to-equity ratio of 0.12 indicates a low reliance on debt financing, contributing to a strong balance sheet.
The cash ratio of 0.70 suggests that while the company has some liquidity, it may not have enough cash on hand to cover all current liabilities, which could be a concern in a downturn.
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
EPS
Tyler Technologies has demonstrated exceptional SaaS revenue growth, achieving a 23% increase in Q4 and maintaining 16 consecutive quarters of at least 20% growth. This reflects strong market demand and successful execution of their cloud-first strategy.
With 97% of new software contract value in the cloud and total annualized recurring revenue reaching approximately $1.86 billion (up 14.9%), Tyler's business model is increasingly based on high-quality, recurring revenue streams.
The company achieved a significant free cash flow of $216 million in Q4, reflecting effective operational management and a robust financial position. This positions Tyler well for future investments and shareholder returns.
Tyler's strategic focus on expanding its cloud offerings and enhancing its product portfolio, including the newly acquired AI-driven solutions, indicates strong growth potential. They aim for organic recurring revenue CAGR of 10% to 12% and sustainable margin expansion.
The public sector's drive for digital modernization supports strong demand for Tyler's solutions. The company maintains a leading position with opportunities for cross-selling and expanding into new markets, particularly in public safety and payments.
Tyler's commitment to integrating AI into its products will enhance their competitive position and drive efficiency for clients, positioning the company favorably as public sector interest in AI grows.
As Tyler transitions to a SaaS model, they expect a decline in maintenance and license revenues by 4-6% and 18-20%, respectively, which indicates a potential short-term revenue impact as the company phases out lower-margin offerings.