TYL
Tyler Technologies, Inc.
$303.52
Platform & Compounding FCF
85%
Two-stage FCF DCF
Mild
·
Conviction
Overvalued
Trading 1.8% above fair value
You pay
$307.68
Bear
$239.63
Fair
$302.35
Bull
$361.19
Bear
$239.63
-22.1%
5% stage 1 growth, 11% discount
Fair
$302.35
-1.7%
8% stage 1 growth, 11% discount
Bull
$361.19
+17.4%
11% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (8% base case)
Terminal Value % of EV
37%
Implied Market Multiple
24.0x
Market is pricing in (growth)
11.4%
vs 8.3% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $435.30 from 37 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $302.35 per share.
Warnings
Stock-based employee pay equals 48% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $435.30 (from 37 analysts). Our estimate is 44% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions