Yahoo Finance How to Play Tyler Technologies (TYL) Ahead of Q1 Earnings?
Tyler Technologies TYL, a leading provider of integrated software and technology services for the public sector, is set to report first-quarter 2024 results after market close on Apr 24.
Tyler Technologies has a history of delivering solid financial performance and consistent revenue growth. The company's focus on providing innovative solutions tailored to the needs of local governments, schools and other public sector entities has driven its success. With a proven track record of execution, Tyler Technologies has earned the trust of its customers.
Cloud Adoption Aids Growth
Despite the challenges posed by the ongoing macroeconomic uncertainties and their impact on government budgets, Tyler Technologies has demonstrated resilience. The essential nature of its software solutions, which support critical functions such as tax collection, court management and public safety, has helped sustain demand, even during uncertain times. As governments increasingly prioritize digital transformation initiatives, Tyler Technologies stands to benefit from the continued modernization of public sector operations.
Tyler Technologies, Inc. Price and EPS Surprise
Tyler Technologies, Inc. price-eps-surprise | Tyler Technologies, Inc. Quote
The public sector software market is poised for growth as governments seek to improve efficiency, transparency and citizen services through technology. With the increasing adoption of cloud-based solutions, data analytics and cybersecurity measures, the demand for Tyler Technologies' offerings is expected to remain robust in the long term. Moreover, the Biden administration's focus on infrastructure investment and digital infrastructure upgrades bodes well for companies operating in this space.
The public sector’s ongoing software transition from on-premise and outdated systems to scalable cloud-based systems benefits Tyler Technologies. The multi-year transition is expected to boost the company’s recurring revenues, which currently account for approximately 80% of the top line.
Further, the strong adoption of cloud-based systems is expected to drive subscription revenues, Tyler’s fastest-growing revenue category over the past seven years. Subscription revenues increased from $111.9 million in 2015 to $1.16 billion in 2023. We estimate Tyler Technologies’ subscription revenues to increase 10.5% year over year to $309.8 million in the first quarter of 2024.
However, budget constraints at the state and local levels and delays in government spending amid ongoing macroeconomic challenges could impact the company's revenue growth. Additionally, increased competition from other software providers and regulatory changes affecting the public sector could pose challenges.
In conclusion, Tyler Technologies has established itself as a leader in the public sector software market with a track record of success. While there may be short-term challenges, the company's long-term growth prospects remain promising. Investors with a bullish outlook on the public sector technology sector may consider holding TYL stock ahead of its first-quarter earnings report, betting on the company's ability to deliver strong results and capitalize on favorable industry trends.
First-Quarter Estimates
The Zacks Consensus Estimate for Tyler Technologies’ first-quarter earnings has been revised upward by a penny to $2.03 per share over the past 60 days and indicates an improvement of 15.3% from the year-ago quarter’s earnings of $1.76. The consensus mark for revenues stands at $507.8 million, which calls for a 7.6% increase from the year-ago quarter.
This Zacks Rank #3 (Hold) company’s earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 5.3%.
In the last reported quarter, TYL’s non-GAAP earnings of $1.89 per share surpassed the Zacks Consensus Estimate by 3 cents. However, revenues of $480.9 million missed the consensus mark of $483.3 million. Nonetheless, the top and bottom lines witnessed a year-over-year increase of 6.3% and 13.9%, respectively.
Other Stocks Reporting This Week
Some other stocks in the broader technology sector that are going to report their quarterly results this week include Vertiv Holdings VRT, Meta Platforms META and CACI International CACI. Vertiv currently sports a Zacks Rank #1 (Strong Buy), while Meta Platforms and CACI each carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Vertiv’s first-quarter 2024 earnings has been revised upward by a penny to 37 cents per share over the past 30 days and indicates an improvement of 54.2% from the year-ago quarter’s earnings of 24 cents. The consensus mark for revenues stands at $1.64 billion, which calls for a 7.6% increase from the year-ago quarter.
The Zacks Consensus Estimate for Meta Platforms’ first-quarter 2024 earnings has been revised upward by a penny to $4.32 per share over the past seven days and suggests an improvement of 63.6% from the year-ago quarter’s earnings of $2.64. The consensus mark for revenues stands at $36.25 billion, which implies a 26.6% increase from the year-ago quarter.
The Zacks Consensus Estimate for CACI’s third-quarter fiscal 2024 earnings has been revised downward by 2 cents to $5.53 per share over the past 30 days and indicates an improvement of 12.4% from the year-ago quarter’s earnings of $4.92. The consensus mark for revenues stands at $1.86 billion, which calls for a 6.7% increase from the year-ago quarter.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
CACI International, Inc. (CACI) : Free Stock Analysis Report
Tyler Technologies, Inc. (TYL) : Free Stock Analysis Report
Vertiv Holdings Co. (VRT) : Free Stock Analysis Report
Meta Platforms, Inc. (META) : Free Stock Analysis Report
