Tyler Technologies Earnings: Another Good Quarter and Positive Setup Throughout 2025

We are raising our fair value estimate to $650 per share from $630 for wide-moat Tyler, after the firm reported solid third-quarter results, with 2025 guidance that was slightly light on the top line but better than expected in terms of profitability. We therefore tweaked our margin assumptions slightly higher over the next few years. Healthy trends persist, including larger deals, a shift to SaaS, strong conversions of on-premises customers to the cloud, more rapid margin benefit capture from the cloud transition, successful cross-selling, and a buoyant demand environment. We also see consistent growth and margin expansion over time driven by the maturation of the cloud transition, from which we think Tyler, as the leader in local government software, should benefit. Even after raising our fair value estimate, we see shares as fairly valued based on strong recent share performance.