Tyler Technologies (TYL) Stock Forecast & Price Target

Tyler Technologies demonstrated strong financial performance in its latest reporting period, highlighted by a 37% year-over-year increase in new software bookings, amounting to approximately $141 million in 4Q. The company's recurring revenue showed substantial growth of 14.9% year-over-year, reaching $463.9 million, and represented 85.7% of total revenues, contributing to a total annual recurring revenue (ARR) of $1.86 billion. Additionally, subscription revenue surged by 21.9% year-over-year to $348.8 million, alongside a 12.5% year-over-year growth in total revenue, indicating solid demand for its software solutions among local government entities.

The analysis of Tyler Technologies indicates a bearish outlook due to several fundamental financial challenges. The company is expected to experience significant declines in key revenue streams, with license revenues projected to drop by 18% to 20%, along with expected declines of 4% to 6% in maintenance revenues and similar declines in hardware and other revenues. Additionally, as the company focuses on transitioning to a cloud-based model, its professional services revenue is anticipated to either remain flat or decrease by approximately 3% in FY25, which could further hinder overall revenue growth and profitability in the near term.