Tyler Technologies, Inc. – Value Analysis (NYSE:TYL) : September 26, 2017

Capitalcube gives Tyler Technologies, Inc. a score of 91.

Our analysis is based on comparing Tyler Technologies, Inc. with the following peers – CA, Inc., International Business Machines Corporation, K12 Inc., HP Inc., Thomson Reuters Corporation, Zebra Technologies Corporation Class A, 2U, Inc. and Motorola Solutions, Inc. (CA-US, IBM-US, LRN-US, HPQ-US, TRI-US, ZBRA-US, TWOU-US and MSI-US).

Investment Outlook

Tyler Technologies, Inc. has a fundamental score of 91 and has a relative valuation of OVERVALUED.

Fundamental Score

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Company Overview

  • Considering peers, relative underperformance over the last year and the last month suggest a lagging position.
  • It’s current Price/Book of 6.30 is about median in its peer group.
  • TYL-US outperforms its peers with a relatively high operating performance and the market also expects faster growth relative to its peers
  • TYL-US‘s relatively high profit margins are burdened by relative asset inefficiency.
  • The company’s year-on-year change in revenues and earnings are better than the median among its peer group.
  • TYL-US‘s return on assets currently and over the past five years suggest that its relatively high operating returns are sustainable.
  • The company’s relatively high pre-tax margin suggests tight control on operating costs versus peers.
  • Compared with the peers chosen, TYL-US has had faster revenue growth in prior years and a current P/E ratio that suggests faster growth in the future suggesting superior growth expectations.
  • The company’s level of capital investment seems appropriate to support the company’s growth.
  • TYL-US currently does not have any debt.

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Leverage & Liquidity

TYL-US currently does not have any debt.

  • We consider the company to have a Quick & Able profile as it currently does not have any debt. In comparison, the median level of debt as percent of enterprise value for its peer group is currently 20.46%.
  • Of the 8 chosen peers for the company, only 7 of the stocks have an outstanding debt balance. Companies with no debt include TWOU-US.

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Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
CA, Inc. 20.46 1.33 15.65 40.51
International Business Machines Corporation 25.82 1.25 15.86 34.57
K12 Inc. 4.27 4.02 No interest exp 480.28
HP Inc. 24.61 0.97 12.79 46.11
Thomson Reuters Corporation 17.6 0.79 4.95 33.12
Zebra Technologies Corporation Class A 31.56 1.16 1.83 12.62
2U, Inc. 0 3.28 -23577 999
Motorola Solutions, Inc. 25.19 1.33 5.37 29.4
Tyler Technologies, Inc. 0 0.98 65.72 999
Peer Median 20.46 1.25 12.79 40.51
Best In Class 4.27 4.02 No interest exp 999

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Company Profile

Tyler Technologies, Inc. provides integrated technology and management services for the public sector with a focus on local governments. It develops and markets a broad line of software products and services to address the information technology (IT) needs of cities, counties, schools, and other local government entities. Also, the firm provides IT services to clients, including software and hardware installation, data conversion, training and for certain clients, product modifications, along with continuing maintenance and support for clients using systems. Its services include property appraisal outsourcing services for taxing jurisdictions. It operates through Enterprise Software and Appraisal & Tax segments. The Enterprise Software segment provides municipal, 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.

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