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.