Back to top

Image: Bigstock

Tyler's (TYL) Acquisition of NIC Prompts View Raise for 2021

Read MoreHide Full Article

Tyler Technologies (TYL - Free Report) recently raised its outlook for 2021, taking into account its strong year-to-date performance and benefits from the acquisition of NIC.

The company now expects adjusted revenues between $1.51 billion and $1.54 billion, up from the previously guided range of $1.119-$1.22 billion. The Zacks Consensus Estimate for revenues stands at $1.21 billion, suggesting a 7.95% year-over-year growth.

Notably, from the date of the closure of the acquisition (Apr 21, 2021), NIC is likely to bring in $310-$315 million in sales, including $21 million of COVID-related one-time revenues from TourHealth and pandemic-led unemployment services.

Markedly, Tyler had previously projected the NIC acquisition to be accretive to non-GAAP earnings per share, EBITDA, recurring revenue mix and free cash flow per share in 2021.

Moreover, the non-GAAP earnings guidance is projected to be $6.65-$6.77 per share, up from the previous range of $5.65-$5.77. The consensus mark for earnings is pegged at $5.71 per share, suggesting a 3.44% year-over-year growth.

Capital expenditures of $40-$42 million and interest expenses of about $24 million are expected.

Markedly, in April this year, Tyler acquired NIC in an all-cash transaction worth $2.3 billion. The company funded the acquisition with a combination of approximately $700 million of cash on its balance sheet and a public offering of $1.6-billion aggregate principal amount of convertible senior notes. The move reflected the company’s strategy to bank on the pandemic-induced shift to online services and electronic payments by governments.

Zacks Rank & Stocks to Consider

Tyler currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader technology sector include Silicon Motion Technology Corporation (SIMO - Free Report) , Lam Research Corporation (LRCX - Free Report) and LG Display Co., Ltd. (LPL - Free Report) , all sporting a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term earnings growth rate for Silicon Motion Technology Corporation, Lam Research and LG Display is currently pegged at 8%, 32.8% and 32.56%, respectively.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.

Click here for the 4 trades >>

Published in