Tyler Technologies, Inc. (TYL) Needs To Do More To Convince Analysts

Tyler Technologies, Inc. (NYSE:TYL) is one of the 10 best beaten down software stocks with the highest upside potential. Tyler Technologies, Inc. (NYSE:TYL) received a Buy rating from D.A. Davidson analyst Peter Heckmann on February 17. He maintained his $460 price target for the stock. On February 13, Adam Hotchkiss of Goldman Sachs also reiterated his Buy rating on Tyler Technologies, Inc. (NYSE:TYL) while cutting the firm’s price target from $560 to $420. The price target revision came after the company reported its fourth-quarter results. According to the firm, the continued adoption of technology by state and local governments and a multi-year shift to the cloud support its long-term growth potential. However, the analyst believes that it will need to deliver consistent results over several quarters to win back investor confidence. The share price dropped about 15% as a result of fourth-quarter revenue and guidance that were below expectations.

As reported on February 12, Tyler Technologies, Inc. (NYSE:TYL) recorded total revenue of $575.2 million for the quarter. Total bookings during the quarter were $601 million, approximately the same as last year’s Q4. For the full year, total bookings rose 1.4%. Total annual recurring revenue grew by 10.9% to $2.06 billion. Non-GAAP operating margin was 24.1%, slightly lower than the previous year. However, for the full year, non-GAAP operating margin improved by 150 basis points, coming in at 26%. Free cash flow and cash flow from operations both hit record levels during the quarter. Free cash flow for the quarter was $236.9 million, while for the full year it was $620.8 million.

CFO Brian Miller commented on the guidance:

Our annual guidance for 2026 is as follows: we expect total revenues will be between $2.5 billion and $2.55 billion. The midpoint of our guidance implies growth of approximately 8.3%.

Tyler Technologies, Inc. (NYSE:TYL) operates as a provider of software and technology management solutions. It serves the public sector. The company operates through the Platform Technologies and Enterprise Software segments. It was incorporated in 1966 and is based in Plano, Texas.

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