Tyler Technologies ( TYL Quick Quote TYL - Free Report) has announced that Colorado Statewide Internet Portal Authority (“SIPA”), on behalf of the state of Colorado, signed a five-year contract extension for its digital government and payment processing services. The deal can be attributed to the Texas-based company’s acquisition of NIC in April 2021.
The relationship between Colorado SIPA and NIC is 18 years long. The newly signed agreement reflects a further extension of their relationship. Tyler’s subsidiary, NIC, manages more than 1,100 digital government services and over 400 websites for the Colorado state government.
Digital Transformation Drives Tyler Product’s Demand
It is worth mentioning that Tyler has been benefiting from the public sector’s ongoing transition from on-premise and outdated systems to scalable cloud-based systems. TYL has been consistently enhancing its core software applications and expanding complementary product and service portfolios to cater to the changing needs of customers while keeping pace with technological advancements.
TYL has been pursuing strategic takeovers to broaden its product and service offerings, enter new markets related to local governments, attract clients and expand geographically. Last week, the company revealed that it has acquired a Massachusetts-based analytics company offering exemplary real estate appraisals and assessments for states, counties and municipalities — Safeground Analytics.
With this buyout, Tyler intends to accelerate its appraisal services businesses by bringing in a team of experienced appraisers, analysts, statisticians, economists, computer scientists and assessors from Safeground Analytics. The analytics company will offer TYL residential and commercial reassessments and deliver litigation support, expert witness testimony solutions for property appraisal matters, auditing and monitoring services.
In May 2022, Tyler acquired Quatred, a systems integrator and solution provider that assists clients by implementing advanced touchless technologies, including barcoding. In February 2022, the company acquired U.S. eDirect, a market-leading provider of technology solutions for campground and outdoor recreation management. However, frequent acquisitions pose significant integration risks for the company.
Furthermore, Tyler’s near-term growth prospects are likely to be affected by delays in procurement processes and lengthening sales cycles amid ongoing macroeconomic uncertainties. Also, many customers are expected to face budget pressures in the near term.
Additionally, high investments in R&D initiatives are likely to hurt margins. Intensifying competition from the likes of Oracle, SAP and Workday might keep Tyler’s pricing under pressure and negatively impact the gross margin.
Zacks Rank & Stocks to Consider
Tyler currently carries a Zacks Rank #3 (Hold). Shares of TYL have declined 21.9% over the past year.
Some better-ranked stocks from the broader technology sector are
Wix.com ( WIX Quick Quote WIX - Free Report) , Aspen Technology ( AZPN Quick Quote AZPN - Free Report) and ServiceNow ( NOW Quick Quote NOW - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see . the complete list of today's Zacks #1 Rank (Strong Buy) stocks here
The Zacks Consensus Estimate for Wix.com’s first-quarter 2023 earnings has been revised upward to 16 cents per share from a loss of 9 cents 30 days ago. For 2023, earnings estimates have been revised northward by 108.8% to $1.42 per share in the past 30 days.
Wix.com's earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while missing the same on one occasion, the average surprise being 225%. Shares of WIX have gained 15.8% in the trailing 12 months.
The Zacks Consensus Estimate for Aspen Technology's third-quarter fiscal 2023 earnings has been revised upward by 17 cents to $1.66 per share in the past 60 days. For fiscal 2023, earnings estimates have been revised northward by 2 cents to $7.10 per share in the past 30 days.
Aspen Technology’s earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while missing the same on one occasion, the average surprise being 5.2%. Shares of AZPN have rallied 48.8% over the past year.
The Zacks Consensus Estimate for ServiceNow's first-quarter 2023 earnings has been revised northward by a penny to $2.02 per share over the past 30 days. For 2023, earnings estimates have moved downward by 2 cents to $9.15 per share in the past 30 days.
ServiceNow's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 6.9%. Shares of NOW have plunged 20.1% in the trailing 12 months.