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The Tennessee Comptroller of the Treasury is now using Tyler's software to manage property taxes and assessments. This is a routine but helpful win that shows the company continues to successfully install its systems at the state level. For a business that relies on long-term government contracts, every successful launch reinforces its high retention rate. Once a state office integrates its core financial data into Tyler's platform, it becomes very difficult and expensive for them to switch to a competitor.
Source: Business Wire
UBS lowered its price target for Tyler Technologies to $395. Even with the lower target, the firm's estimate remains about 20 percent higher than where the stock is currently trading. Price target changes like this are common after earnings reports as analysts adjust their math for the latest results. Since the analyst did not change their overall rating on the stock, this is a routine update rather than a shift in how they view the company's long-term health.
Source: UBS
Tyler has acquired CODY Systems, a company that provides software to public safety agencies. This move adds more specialized tools to Tyler's existing suite of products for police, fire, and emergency medical services.
Tyler often grows by buying smaller firms that already have deep relationships with local governments. By folding CODY's technology into its own platform, Tyler can sell more services to its current customers and make its software even more essential to how these agencies operate every day.
Source: Business Wire
Tyler Technologies reported mixed results for the quarter, but the parts of the business that drive its long-term value showed strength. Subscription revenue grew about 22 percent, continuing a multi-year streak of high growth as more government agencies move their software to the cloud. While total revenue of $560 million was lower than the $650 million analysts expected, the company earned $3.08 per share, slightly beating expectations.
The company also announced a new $1.5 billion plan to buy back its own shares. A buyback happens when a company uses its extra cash to purchase its own stock from the market, which reduces the total number of shares and makes each remaining share more valuable. This large commitment suggests management believes the stock is currently a good value and that the business is generating plenty of extra cash to return to owners.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
Guggenheim started covering Tyler Technologies for the first time, setting a price target of $440. This target is roughly 34 percent higher than where the stock is trading today.
When a major firm starts following a company, it often brings more attention from large institutional investors. The high price target reflects confidence that Tyler's transition to cloud-based software will continue to drive higher profits and steady growth in the coming years.
Source: Guggenheim
Management has a very consistent habit of clearing the bar, beating expectations in six of the last eight quarters. You can generally trust the targets they set.
| Expectation | |
|---|---|
| EPS | $3.42 |
| Revenue | $638M |
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