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On Monday, JPMorgan reiterated an Overweight rating on Tyler Technologies, Inc. (NYSE: NYSE:TYL), following the news of the company’s expanded strategic relationship with Fiserv (NYSE:FI), a financial services technology provider. With a market capitalization of $26.1 billion and trading near its 52-week high, InvestingPro analysis suggests the stock is currently trading above its Fair Value, though it maintains strong financial health metrics with an overall rating of "GOOD." The collaboration was highlighted during Fiserv’s earnings call last week, underscoring Tyler’s ongoing venture into the payments sector, which has become a significant source of recurring revenue, client engagement, and free cash flow (FCF) growth.
Tyler Technologies operates as a payment facilitator, enabling transactions such as the purchase of state park passes or payment of parking tickets. Despite this, Tyler relies on a network of third-party payment processors and partners to complete transactions fully. The deepening partnership with Fiserv, considered a top-tier provider, signals Tyler’s commitment to bolstering its payments business. The company has demonstrated solid execution with an 8% revenue growth in the last twelve months and maintains a healthy balance sheet with moderate debt levels.
Transactions currently account for 39% of Tyler’s recurring revenues as of the third quarter of 2024. The firm’s focus on this aspect of its operations is believed to be undervalued by investors. JPMorgan’s analysts continue to back Tyler Technologies’ stock as the company approaches its fourth-quarter 2024 results, which are expected to be announced after the market closes on February 12, 2025. Tyler Technologies remains one of JPMorgan’s two top stock picks for the year 2025. InvestingPro subscribers can access 13 additional investment tips and a comprehensive Pro Research Report, offering deeper insights into Tyler’s financial health, valuation metrics, and growth prospects ahead of the upcoming earnings announcement.
In other recent news, Tyler Technologies, a major player in integrated software and technology services, has been making significant moves. The company recently announced the acquisition of MyGov LLC, a firm known for its platform designed to streamline operations for local government entities. This strategic acquisition is expected to enhance Tyler’s offerings and expand its capabilities in serving municipal clients.
In addition to this, Tyler Technologies has seen changes in its executive team, including the introduction of a chief administrative officer role and new appointments for the chief marketing and chief legal officer positions. The reshuffle is part of the company’s commitment to continuous growth and innovation.
Analysts from DA Davidson have maintained a Neutral rating on Tyler Technologies, with a price target of $575. The firm anticipates that the company’s financial performance will align with or slightly surpass forecasts and consensus estimates. DA Davidson also expects Tyler Technologies to issue its financial guidance for the year 2025 during the upcoming earnings report.
The investment firm Piper Sandler has listed Tyler Technologies among its top stock picks for 2025, citing the company’s transition to a nearly 100% SaaS sales mix and potential for accelerated ’flips’ from on-premise to cloud-based services. Furthermore, Truist Securities has identified Tyler Technologies as a company well-positioned to benefit from advancements in AI.
These are recent developments, and they highlight the ongoing strategic moves and potential growth opportunities for Tyler Technologies.
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