Buy Rating Affirmed: Tyler Technologies’ Strong Market Position and Growth Trajectory

JMP Securities analyst Trevor J. Walsh has reiterated their bullish stance on TYL stock, giving a Buy rating on May 24.

Trevor J. Walsh has given his Buy rating due to a combination of factors that indicate Tyler Technologies’ strong market position and potential for growth. His assessment includes observations from the company’s largest user conference to date and interactions with Tyler’s executive team and clientele. He highlights the continued transition to cloud-based services, which is being propelled by both internal initiatives and external market forces. Additionally, Walsh notes Tyler Technologies’ competitive advantage stemming from their extensive suite of offerings with cloud and SaaS capabilities, as well as significant growth opportunities within their wide installation base.

Furthermore, Trevor J. Walsh appreciates Tyler Technologies’ potential for long-term capital appreciation, based on several key points. He emphasizes the company’s role as a strategic consolidator in a fragmented industry, focusing on government entities at various levels. Walsh also points to the largest installed customer base within the government vertical markets, which presents numerous cross-selling and upselling opportunities. The company’s calculated total addressable market has more than doubled over the past five years, with expected annual growth rates of 7%-9%. Lastly, Walsh identifies the strategic shift to a cloud-based revenue model, which promises more stable and predictable financial growth, as a pivotal factor in the company’s future success.

In another report released on May 24, Wells Fargo also maintained a Buy rating on the stock with a $550.00 price target.

Based on the recent corporate insider activity of 54 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of TYL in relation to earlier this year.

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Tyler Technologies (TYL) Company Description:

Tyler Technologies, Inc. engages in the provision of integrated technology and management solutions and services for public sector with a focus on local governments. It operates through the Enterprise Software, and Appraisal and Tax segments. The Enterprise Software segment provides municipal and county governments and schools with software systems to meet their information technology and automation needs for mission-critical back-office functions such as financial management, courts, and justice processes. The Appraisal and Tax segment provides systems and software that automate the appraisal and assessment of real and personal property, as well as property appraisal outsourcing services for local governments and taxing authorities. The company was founded in 1966 and is headquartered in Plano, TX.