Tyler Technologies, a provider of integrated software and technology services to state and local governments, is the IBD Stock of the Day. Tyler stock has gained nearly 40% in 2024.
On the stock market today, shares in Tyler rose 1.4% to close at 586.66.
Further, Tyler has forged a flat base with an entry point of 593.50. Also, Tyler stock has been holding above its 21-day exponential moving average.
Tyler offers professional IT services, including software and hardware installation, data conversion, training, and product customization.
It has been shifting to a subscription-based business model and offers software through Amazon Web Services, part of Amazon.com. William Blair analyst Jonathan Ho in a report said most new customers buy cloud-based products, not on-premise software.
Meanwhile, the U.S. federal government has been emphasizing the need to upgrade outdated technology in an effort to improve cybersecurity, said Peter Heckmann, analysts at D.A. Davidson, in a report.
Many local and state governments still use legacy software — such as COBOL and Visual BASIC — first installed in the 1980s or before.
Tyler Stock: Public Safety Business Growing
Tyler's second-quarter adjusted profit rose 19% to $2.41 a share. Revenue rose 7% to $541 million.
Tyler has been public since 1966. It shifted its focus to the public sector software market in 1997.
Acquisitions have been a big part of its growth strategy. Since 1998, it has completed roughly 60 acquisitions.
More recently, the company has focused on the public safety sector, noted Evercore ISI analyst Kirk Materne in a report.
"Public safety momentum is growing and having a network effect with their sixth state police agency win," Materne said in a review of Q2 earnings. "With only 12% penetration of state police agencies we believe there is ample room to grow."
Tyler Stock: Payment Software A Bright Spot
Oppenheimer analyst Ken Wong said payments software has been a source of strength with both customer adoption and transactional volumes tracking ahead of expectations.
"Tyler is seeing good momentum with payments and is the component of its business that has the most upside relative to its long-term outlook," Wong said in a report. "Payments have been responsible for outperformance so far in 2024."
Plano, Texas-based Tyler owns a Relative Strength Rating of 93 out of a possible 99. The best stocks tend to have an 80 or better RS Rating.
An upward-trending relative strength line tells you the stock is outperforming the general market.
Tyler stock has an Accumulation/Distribution Rating of B-minus, according to IBD Stock Checkup.
The rating analyzes price and volume changes in a stock over the past 13 weeks of trading. The rating, on an A+ to E scale, measures institutional buying and selling in a stock. A+ signifies heavy institutional buying; E means heavy selling. Think of the C grade as neutral.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
