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Is Tyler (TYL) Worth Buying Amid Current Market Uncertainties?
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Tyler Technologies (TYL - Free Report) stock has plunged 34.6% year to date (“YTD”) amid the massive sell-off seen this year so far in the broader equity market. The major stock market indexes, the Dow Jones Industrial Average, Nasdaq Composite and S&P 500, have declined 11.2%, 24.9% and 15.7%, respectively, YTD.
The wild swing in the equity market has been triggered by concerns over inflation, rising interest rates and increasing oil prices. The ongoing Russia-Ukraine war has further increased worries for investors about the global economic recovery.
However, this sell-off in the broader equity market has led to a massive correction in several technology companies’ stock prices, which are currently available at attractive valuation.
In our opinion, Tyler Technologies is one such company that is one of the most beaten down stocks in the technology space. Given the strength of its fundamentals and solid prospects, it seems wise to add TYL stock to your portfolio now for long-term gains.
Why Is Tyler an Attractive Pick?
Trading Way Below 52-Week High: Tyler Technologies stock currently trades lower than its 52-week high, which reflects its potential to go upward. The stock’s closing price of $351.61 on Jun 9 is 37% lower than the 52-week high of $557.55 attained on Nov 17, 2021.
Attractive Valuation: Tyler Technologies currently trades at an attractive valuation multiple. The stock trades at a one-year forward price-to-earnings multiple of 44.29X compared with its five-year average of 102.86X.
Solid Rank & Growth Score: Tyler Technologies currently carries a Zacks Rank #2 (Buy) and has a Growth Score of A. Our research shows that stocks with a Growth Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or #2, offer the best investment opportunities to investors. Thus, the company appears to be a compelling investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Positive Earnings Surprise History: TYL has an impressive earnings surprise history. The company outpaced estimates in the trailing four quarters, delivering an average earnings surprise of 8.6%.
Upward Earnings Estimate Revision: The Zacks Consensus Estimate for 2022 and 2023 earnings has been revised upward by 9 cents and 32 cents per share over the past 60 days, signifying analysts’ confidence in the stock. The consensus mark of $7.59 per share for 2022 earnings suggests growth of 8% from the year-ago reported figure. Moreover, earnings are expected to register 10.5% growth in 2023 and reach $8.39 per share.
Robust Fundamental Growth Drivers: Tyler Technologies is a leading provider of integrated information-management solutions and services for the public sector. The company serves its customers both on-premise and in the cloud.
Tyler Technologies is benefiting from higher recurring revenues, post-acquisition contributions from NIC, and the constant rebound of the market and sales activities to pre-pandemic levels. In the first quarter of 2022, the company’s revenues and earnings soared approximately 55% and 33%, respectively, on a year-over-year basis.
The public sector’s ongoing transition from the on-premise and outdated systems to scalable cloud-based systems is a positive. The pandemic-led remote-working trend is also driving the demand for its connectivity and cloud services.
In recent years, Tyler Technologies’ growth trajectory has been driven by acquisitions. The company has been pursuing strategic takeovers to broaden its product and service offerings, enter new markets related to local governments, attract clients and expand geographically.
Over the past year, the company acquired four important businesses – NIC, US eDirect, Arx and VendEngine. TYL is likely to pursue more acquisitions that will strategically align with its current offerings. Along with investments in R&D, acquisitions are likely to strengthen the firm’s product offerings and clientele over the long run.
Other Stocks to Consider
Some other top-ranked stocks from the broader technology sector are ON Semiconductor (ON - Free Report) , Analog Devices (ADI - Free Report) and MaxLinear (MXL - Free Report) . ON and Analog Devices each sport a Zacks Rank #1, while MaxLinear has a Zacks Rank #2.
The Zacks Consensus Estimate for ON's second-quarter 2022 earnings has been revised to $1.26 per share from $1.04 over the past 60 days. For 2022, earnings estimates have moved north by 18% to $4.91 per share in the past 60 days.
ON's earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 2.8%. Shares of ON have plunged 7.8% YTD.
The Zacks Consensus Estimate for Analog Devices' third-quarter fiscal 2022 earnings has been revised upward by 24 cents to $2.42 per share over the past 30 days. For fiscal 2022, earnings estimates have moved north by 9.6% to $9.24 per share in the past 30 days.
Analog Devices' earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 7.7%. Shares of ADI have decreased 8.1% YTD.
The Zacks Consensus Estimate for MaxLinear's second-quarter 2022 earnings has been revised upward by 10 cents to $1.02 per share over the past 60 days. For 2022, the Zacks Consensus Estimate for MaxLinear's earnings has moved north by 36 cents to $4.07 per share in the past 60 days.
MaxLinear's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 9.6%. Shares of MXL have plunged 47.3% YTD.
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Is Tyler (TYL) Worth Buying Amid Current Market Uncertainties?
Tyler Technologies (TYL - Free Report) stock has plunged 34.6% year to date (“YTD”) amid the massive sell-off seen this year so far in the broader equity market. The major stock market indexes, the Dow Jones Industrial Average, Nasdaq Composite and S&P 500, have declined 11.2%, 24.9% and 15.7%, respectively, YTD.
The wild swing in the equity market has been triggered by concerns over inflation, rising interest rates and increasing oil prices. The ongoing Russia-Ukraine war has further increased worries for investors about the global economic recovery.
However, this sell-off in the broader equity market has led to a massive correction in several technology companies’ stock prices, which are currently available at attractive valuation.
In our opinion, Tyler Technologies is one such company that is one of the most beaten down stocks in the technology space. Given the strength of its fundamentals and solid prospects, it seems wise to add TYL stock to your portfolio now for long-term gains.
Why Is Tyler an Attractive Pick?
Trading Way Below 52-Week High: Tyler Technologies stock currently trades lower than its 52-week high, which reflects its potential to go upward. The stock’s closing price of $351.61 on Jun 9 is 37% lower than the 52-week high of $557.55 attained on Nov 17, 2021.
Tyler Technologies, Inc. Price
Tyler Technologies, Inc. price | Tyler Technologies, Inc. Quote
Attractive Valuation: Tyler Technologies currently trades at an attractive valuation multiple. The stock trades at a one-year forward price-to-earnings multiple of 44.29X compared with its five-year average of 102.86X.
Solid Rank & Growth Score: Tyler Technologies currently carries a Zacks Rank #2 (Buy) and has a Growth Score of A. Our research shows that stocks with a Growth Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or #2, offer the best investment opportunities to investors. Thus, the company appears to be a compelling investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Positive Earnings Surprise History: TYL has an impressive earnings surprise history. The company outpaced estimates in the trailing four quarters, delivering an average earnings surprise of 8.6%.
Upward Earnings Estimate Revision: The Zacks Consensus Estimate for 2022 and 2023 earnings has been revised upward by 9 cents and 32 cents per share over the past 60 days, signifying analysts’ confidence in the stock. The consensus mark of $7.59 per share for 2022 earnings suggests growth of 8% from the year-ago reported figure. Moreover, earnings are expected to register 10.5% growth in 2023 and reach $8.39 per share.
Robust Fundamental Growth Drivers: Tyler Technologies is a leading provider of integrated information-management solutions and services for the public sector. The company serves its customers both on-premise and in the cloud.
Tyler Technologies is benefiting from higher recurring revenues, post-acquisition contributions from NIC, and the constant rebound of the market and sales activities to pre-pandemic levels. In the first quarter of 2022, the company’s revenues and earnings soared approximately 55% and 33%, respectively, on a year-over-year basis.
The public sector’s ongoing transition from the on-premise and outdated systems to scalable cloud-based systems is a positive. The pandemic-led remote-working trend is also driving the demand for its connectivity and cloud services.
In recent years, Tyler Technologies’ growth trajectory has been driven by acquisitions. The company has been pursuing strategic takeovers to broaden its product and service offerings, enter new markets related to local governments, attract clients and expand geographically.
Over the past year, the company acquired four important businesses – NIC, US eDirect, Arx and VendEngine. TYL is likely to pursue more acquisitions that will strategically align with its current offerings. Along with investments in R&D, acquisitions are likely to strengthen the firm’s product offerings and clientele over the long run.
Other Stocks to Consider
Some other top-ranked stocks from the broader technology sector are ON Semiconductor (ON - Free Report) , Analog Devices (ADI - Free Report) and MaxLinear (MXL - Free Report) . ON and Analog Devices each sport a Zacks Rank #1, while MaxLinear has a Zacks Rank #2.
The Zacks Consensus Estimate for ON's second-quarter 2022 earnings has been revised to $1.26 per share from $1.04 over the past 60 days. For 2022, earnings estimates have moved north by 18% to $4.91 per share in the past 60 days.
ON's earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 2.8%. Shares of ON have plunged 7.8% YTD.
The Zacks Consensus Estimate for Analog Devices' third-quarter fiscal 2022 earnings has been revised upward by 24 cents to $2.42 per share over the past 30 days. For fiscal 2022, earnings estimates have moved north by 9.6% to $9.24 per share in the past 30 days.
Analog Devices' earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 7.7%. Shares of ADI have decreased 8.1% YTD.
The Zacks Consensus Estimate for MaxLinear's second-quarter 2022 earnings has been revised upward by 10 cents to $1.02 per share over the past 60 days. For 2022, the Zacks Consensus Estimate for MaxLinear's earnings has moved north by 36 cents to $4.07 per share in the past 60 days.
MaxLinear's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 9.6%. Shares of MXL have plunged 47.3% YTD.