TYL Stock Study (10-10-26)

Posted by Mark on September 28, 2026 at 06:44 | Last modified: October 10, 2026 13:21

I recently studied Tyler Technologies Inc. (TYL, $329.55).

M* writes:

     > 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 three core products are Munis,
     > which is the core ERP system, Odyssey, which is the
     > court management system, or CMS, and payments. The
     > company also provides a variety of add-on modules
     > and offers outsourced property tax assessment services.

Over the past decade, this medium-size company has grown sales and EPS at annualized rates of 14.5% and 7.1%. Lines are mostly up, straight, and parallel except for EPS dips in ’18, ’19, and ’21. Five- (10-) year EPS R^2 is 0.81 (0.59), and Value Line (VL) gives an Earnings Predictability score of 95. Shares outstanding increase 12.3% (1.3% per year).

Over the past decade, PTPM leads peer and industry averages while ranging from 10.0% in ’21 to 19.2% in ’17 with a last-5-year mean of 12.3%. ROE is about even with the industry and slightly better than peer averages while ranging from 5.8% in ’23 to 14.7% in ’17 with a mediocre last-5-year mean of 7.2% (shareholder equity consistently positive and increasing 16.8%/year). Debt-to-Capital is less than peer and industry averages with a last-5-year mean of 23.2%.

Quick Ratio is 1.47 and Interest Coverage 65 per M* who assigns a “Wide” Economic Moat, “Standard” rating for Capital Allocation, and a B grade for Financial Health (per BI website). VL gives an A+ rating for Financial Strength and reports zero debt (they actually do have convertible notes but no fixed, non-dilutive long-term debt in the form of bank notes or traditional corporate bonds per Google AI).

RightStock—a new tool on the BI website that I will be tracking for informational purposes—gives a fitness score of 83 (“strong fit”) and opportunity score of 100 (“excellent”).

With regard to sales growth:

• YF gives YOY ACE 9.4% and 10.0% for ’26 and ’27, respectively (based on 22 analysts).
• Zacks gives YOY ACE 9.4% and 9.7% for ’26 and ’27, respectively (10 analysts).
• VL projects 6.1% per year from ’25-’30.
• CFRA projects 9.7% YOY and per year for ’26 and ’25-’27.
• M* offers a 2-year ACE of 9.6% but projects 8.1%/year from ’25-’30 in Equity Report.

My 6.0% forecast is below the range.

With regard to EPS growth:

• MarketWatch gives ACE 15.9% and 15.1% per year for ’25-’27 and ’25-’28 (based on 26 analysts).
• Nasdaq.com gives ACE 18.9% YOY and 21.4% per year for ’27 and ’26-’28 (9 / 9 / 3 analysts for ’26 / ’27 / ’28).
• Seeking Alpha projects 4-year annualized growth of 15.5%.
• Finviz gives 5-year annualized ACE of 15.4% (9).
• LSEG has LTG at 15.1%.
• YF gives YOY ACE of 15.7% and 17.0% for ’26 and ’27, respectively (23).
• Zacks gives YOY ACE 15.8% and 18.0% for ’26 and ’27 along with 5-year annualized of 15.0% (9).
• VL projects 7.0% per year from ’25-’30.
• CFRA projects 15.4% YOY and 15.1% per year for ’26 and ’25-’27, respectively.
• M* gives ACE long-term growth of 15.6% and projects 12.9%/year from ’25-’30 in Equity Report.

My 7.0% per year forecast is at bottom of the long-term-estimate range (mean of seven: 13.8%). Initial value is ’25 EPS of $7.20/share rather than 2026 Q2 EPS of $7.54 (TTM).

My Forecast High P/E is 45.0. Over the past 10 years, high P/E increases from 62.3 to 91.8 (’25) with last-5-year mean of 103 (excluding ’21 and ’22 upside outliers of 146 and 139) and a last-5-year-mean average P/E of 86.0 (also excluding ’21 low P/E of 97.6). I am at bottom of the range (2017).

My Forecast Low P/E is 34.0. Over the past 10 years, low P/E increases from 41.9 to 61.9 (’25) with a last-5-year mean of 69.5 (excluding the 97.6). I am forecasting below the range.

My Low Stock Price Forecast (LSPF) of $244.80 is default based on initial value from above: 25.7% less than previous close and 9.6% less than the 52-week low.

These inputs land TYL in the HOLD zone with a U/D ratio of 1.5. Total Annualized Return (TAR) is 6.6%.

PAR (using Forecast Average—not High—P/E) of 3.9% is less than the risk-free rate (T-bills). If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR instead.

To assess MOS, I start by comparing my inputs with those of Member Sentiment (MS). Based on only 12 studies done in the past 90 days (my study and five outliers excluded: too few for anything but anecdotal comparison), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, and Forecast Low P/E are 7.8%, 12.9%, 50.0, and 36.9, respectively. I am lower across the board. VL projects a future average P/E of 40.0 that is lower than MS (43.4) and higher than mine (39.5).

MS high / low EPS are $13.82 / $7.48 versus my $10.10 / $7.20 (per share). My high EPS is less due mainly to a lower growth rate. VL (M*) high EPS of $15.85 ($15.24) soars above both.

MS LSPF of $270.40 implies a Forecast Low P/E of 36.1: less than the above-stated 36.9. MS LSPF is 2.0% less than the default $7.48/share * 36.9 = $276.01 resulting in more conservative zoning. MS LSPF is still 10.4% greater than mine.

MOS is robust in the study because my inputs are equal to or less than historical/analyst estimates/ranges. Supporting the MOS is MS TAR exceeding mine by 8.5% per year (I might look to modify if this were based on a larger sample size).

With regard to valuation, PEG is 1.7 and 5.8 per Zacks and my projected P/E, respectively: overvalued on average (2.8 per M*). Relative Value [(current P/E) / 5-year-mean average P/E] is extremely cheap at 0.51. “Quick and dirty” cash flow (including capex, which Google AI insists is correct) has stock undervalued by 55%. M* reports stock at a 34% discount.

Per U/D, TYL is a BUY under $297/share. Given forecast high price ~$455, [454.5 / ((14.87 / 100 ) +1 ) ^ 5] ~ $227 meets the BetterInvesting® TAR criterion.

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