Is Tyler Technologies, Inc. (TYL) Fairly Valued?
Tyler Technologies, Inc. valuation review using P/E, fair value, revenue growth, EPS growth, net margin, and TGMCharts chart exhibits as of July 8, 2026.
By TGMCharts Research · Data as of · Updated
Tyler Technologies, Inc.'s market price stands at $311 as of July 8, 2026, carrying a trailing earnings multiple of 43.41x which must be weighed against historical growth and profitability metrics to determine if the valuation is sustainable.
An evaluation of the business shows a five-year revenue CAGR of 15.97% and a five-year EPS CAGR of 8.49%, alongside a net profit margin of 13.26%. These metrics, alongside an analyst-DCF (FMP) reference price of $431 (representing a margin of safety of 37.13%), indicate whether the current premium multiple is supported by underlying operational trends.
- Tyler Technologies, Inc. closed at $311 on July 8, 2026.
- Trailing P/E is 43.41x and price-to-sales is 5.70x.
- Analyst DCF (FMP) is $431 with margin of safety at 37.13%.
- Five-year revenue CAGR is 15.97% and five-year EPS CAGR is 8.49%.
- Earnings yield is 2.30% and net margin is 13.26%.
Valuation Setup
The market price, model anchor, growth support, and profitability facts behind the valuation read.
Evaluating the Premium Multiple on Public Sector Software
Analyzing the equity value of Tyler Technologies, Inc. requires evaluating whether its current market pricing is backed by sufficient operational momentum. At the close on July 8, 2026, the stock was valued at $311, translating to a trailing earnings multiple of 43.41x. This premium multiple places a significant burden of proof on the firm's financial results, requiring sustained growth and strong profitability to justify its current levels.
To establish a complete picture, this analysis examines several key metrics, including the trailing P/E, price-to-sales, earnings yield, and an independent analyst-DCF (FMP) reference model. While the third-party DCF model suggests a margin of safety of 37.13%, we must analyze the underlying growth and margin trends to determine if this discount to fair value is realistic or if the market multiple remains stretched.
Assessing Current Market Multiples and Owner Yields
Market pricing reflects high expectations, with the stock trading at a price-to-sales ratio of 5.70x. This elevated sales multiple corresponds to a thin trailing earnings yield of 2.30%. Looking at these metrics together helps prevent over-reliance on a single P/E ratio, providing a clearer view of the valuation relative to the company's total revenue stream.
TYL P/E ratio Chart
The trailing earnings multiple is the main valuation exhibit because it connects the market price to reported earnings.
Latest P/E ratio: 43.41x as of July 8, 2026.
A P/E ratio of 43.41x has to be judged against the company's five-year EPS CAGR of 8.49%. If the multiple is high while EPS support is ordinary, the valuation thesis becomes more dependent on investor confidence than on fresh earnings power.
TYL price-to-sales Chart
Price-to-sales gives a second valuation lens when margins and earnings can move around the cycle.
Latest price-to-sales ratio: 5.70x.
Price-to-sales at 5.70x is most useful beside net margin of 13.26%. A richer sales multiple is easier to defend when margin quality is durable rather than temporarily elevated.
Comparing Current Market Price to Independent DCF Benchmarks
The independent analyst-DCF (FMP) model calculates a fair value of $431, placing the current market price of $311 below this baseline. This relationship represents a margin of safety of 37.13%. While this suggests a discount, investors should treat this third-party calculation as a single data point and compare it to the full range of valuation scenarios on our dedicated DCF page.
The valuation at a glance
Each input on its own line: what the stock costs against earnings and sales, the model's fair value and how far price sits from it, and the growth and margins behind the business.
TYL earnings yield Chart
Earnings yield reframes valuation from an owner's-yield perspective rather than a multiple perspective.
Latest earnings yield: 2.30%.
The earnings yield of 2.30% is the counterweight to the P/E ratio. If the yield is thin relative to the quality and growth profile, the valuation case needs more help from future compounding.
Analyzing Long-Term Revenue and Earnings Expansion
To sustain its valuation, the business must deliver consistent growth. Over the past five years, the company achieved a compound annual revenue growth rate of 15.97%, while diluted earnings per share grew at a five-year CAGR of 8.49%. While both top-line and bottom-line growth remain positive, the slower rate of EPS expansion relative to revenue growth suggests that multiple expansion, rather than earnings growth alone, has driven recent performance.
TYL revenue
Revenue history tests whether the valuation is being supported by real business expansion.
Five-year revenue CAGR: 15.97%. This is endpoint-to-endpoint from the fiscal years shown — a depressed start year can inflate it, so read it against the recent bars.
Revenue growth is the business-expansion evidence behind the valuation read. A five-year revenue CAGR of 15.97% helps show how much of the valuation story is coming from company growth instead of only multiple expansion.
TYL EPS
EPS history checks whether reported earnings are keeping pace with the market multiple.
Five-year EPS CAGR: 8.49%. This is endpoint-to-endpoint from the fiscal years shown — a depressed or negative start year can inflate it, so read it against the recent bars.
A five-year EPS CAGR of 8.49% is the clearest support figure for a P/E-based conclusion. If EPS growth slows while the multiple remains elevated, the article should become more cautious after refresh.
Evaluating Profitability Margins Against Sales Multiples
Operating efficiency determines how effectively top-line growth translates into shareholder value. The company currently generates a net profit margin of 13.26%. When evaluated alongside the price-to-sales ratio of 5.70x, this profit margin indicates stable profitability. However, if margins contract from these levels, the current sales multiple will become harder to defend.
TYL net margin
Net margin shows whether the company has enough profitability quality to support its valuation.
Net margin (TTM): 13.26%. The bars below are annual fiscal years.
Net margin of 13.26% is a quality signal, not a valuation verdict by itself. It matters because a premium multiple is more defensible when margins are structurally strong and less defensible when margins are peaking.
The Core Arguments for and Against the Valuation
The positive case for the current valuation relies on steady demand for public sector software, supported by a five-year revenue CAGR of 15.97% and a net profit margin of 13.26%. Conversely, the cautious view highlights that a trailing P/E of 43.41x leaves little room for error. If earnings growth falls below the historical five-year CAGR of 8.49%, the stock could face downward pressure.
Bull and bear case
Valuation support
- Five-year revenue CAGR of 15.97% and five-year EPS CAGR of 8.49% support the business case.
- Net margin of 13.26% is the quality check behind the multiple.
Valuation pressure
- A P/E ratio of 43.41x can become demanding if EPS growth slows.
- The analyst-DCF (FMP) margin of safety at 37.13% should change the valuation read if it deteriorates after refresh.
Key Operational Indicators to Monitor
Several factors could alter this valuation perspective. A key indicator is whether the market price moves closer to the analyst-DCF (FMP) reference of $431, which would reduce the current margin of safety. Additionally, any deterioration in the five-year EPS growth trend or a decline in the net profit margin below 13.26% would weaken the fundamental support for the stock's premium multiple.
A Balanced Perspective on the Stock's Fundamental Outlook
In conclusion, the valuation of Tyler Technologies, Inc. depends on a balance between its premium market multiple and its solid financial foundation. While the analyst-DCF (FMP) model suggests a margin of safety, the trailing P/E ratio of 43.41x requires sustained growth and stable margins to remain viable. This analysis is based on verified financial data and does not constitute personalized investment advice.
FAQ
Is TYL fairly valued?
Tyler Technologies, Inc. trades at 43.41x trailing earnings with an analyst-DCF (FMP) margin of safety of 37.13%. The cleanest read comes from comparing that valuation to five-year revenue CAGR of 15.97% and five-year EPS CAGR of 8.49%.
What valuation metric matters most for TYL?
This article anchors on P/E, fair value, margin of safety, price-to-sales, earnings yield, revenue growth, and EPS growth. No single metric is treated as a recommendation.
How often should this TYL valuation view refresh?
We refresh this note after each daily market close, so the price, fair value, and every figure stay current. Numbers here are as of July 8, 2026.
What would change our mind
- A material move away from the analyst-DCF (FMP) reference of $431.
- A break in five-year EPS support, currently 8.49%.
- Margin quality drifting away from the latest net margin of 13.26%.
The bottom line
Tyler Technologies, Inc. valuation research note from TGMCharts Research, grounded in precomputed fundamentals, chart exhibits, and a frozen claim ledger.
Read next: TYL fundamentalsContinue with Tyler Technologies, Inc.'s full stock page.How we checked this researchShowHide
Data snapshot · By TGMCharts Research.
Every number in this note comes from data we compute and store ourselves from the company's reported figures, plus verbatim excerpts from its SEC filings. When a value isn't available we say so — we never fill gaps with estimates.
Latest filing excerpt
10-Q · filed 2026-04-29 · period 2026-03-31 · SEC EDGAR source
- “Operating Results For the three months ended March 31, 2026, total revenues increased 9%, compared to the prior period, primarily due to an increase in subscription revenue.”
- “Subscriptions revenue grew 14.6%, for the three months ended March 31, 2026, compared to the prior period, primarily due to an ongoing shift toward SaaS arrangements for both new and existing clients, along with growth in certain transaction-based revenues.”
- “ARR increased approximately 10% compared to the prior period primarily due to an increase in subscriptions revenue resulting from an ongoing shift toward SaaS arrangements for both new and existing clients and expansion in transaction-based fee arrangements.”
- “Professional services revenue decreased 5% for the three months ended March 31, 2026, compared to the prior period.”
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