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Tyler Technologies Inc TYL

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Tyler Finally Pulls the Lever and Acquires NIC; Subdued Demand Hurts Revenue; FVE Up to $475

Dan Romanoff, CPA Equity Analyst

Analyst Note

| Dan Romanoff, CPA |

After many years of rumors and what-ifs, wide-moat Tyler finally announces what many long believed was a natural deal and that it is acquiring NIC for $2.3 billion. The company also reported mixed fourth-quarter results including weaker-than-anticipated revenue for both the quarter and within guidance, coupled with strong profitability. 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 rolled our model and adjusted our forecast for results, guidance, and NIC’s expected impact on the financials in the back half of the year, which combine to drive our fair value estimate to $475 per share, from $340.

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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 Dec 31, 2020
Fiscal Year End Dec 31, 2020
Stock Type Aggressive Growth
Employees 5,500