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Tyler Technologies Inc TYL

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Morningstar’s Analysis

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Tyler Seeing Green Shoots in Q1 as NIC Acquisition Closes; FVE Still $475

Dan Romanoff, CPA Equity Analyst

Analyst Note

| Dan Romanoff, CPA |

Wide moat Tyler Technologies reported solid first-quarter results including upside to FactSet consensus estimates on both the top and bottom lines. Given that the $2.3 billion NIC acquisition closed on April 21, management is working through the forecasting and integration, and declined to provide updated guidance but plans to do so in late May or early June. We suspect we will have some model updates at that time. As we look ahead, we expect cash flow to focus on debt reduction over the next couple years. Much as it did coming out of the 2008 financial crisis, we expect Tyler will emerge in an even stronger position to capture market share, as its portfolio is broader and it is increasingly exposed to multiple solution sales. We are maintaining our fair value estimate of $475 per share and view shares as modestly undervalued.

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Company Profile

Business Description

Tyler Technologies provides a full suite of software solutions and services that address the needs of cities, counties, schools, courts, and other local government entities. The company’s two core products are Munis, which is the core enterprise resource planning system, and Odyssey, which is the court management system. The company also provides a variety of add-on modules and offers outsourced property tax assessment services.

5101 Tennyson Parkway
Plano, TX, 75024
T +1 972 713-3700
Sector Technology
Industry Software - Application
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2020
Stock Type Aggressive Growth
Employees 5,579