TYL
Tyler Technologies, Inc.
$313.25
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 27.9% below fair value
You pay
$313.25
Bear
$273.71
Fair
$434.56
Bull
$617.63
Bear
$273.71
-12.6%
10% stage 1 growth, 11% discount
Fair
$434.56
+38.7%
16% stage 1 growth, 11% discount
Bull
$617.63
+97.2%
21% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (16% base case)
Terminal Value % of EV
43%
Implied Market Multiple
24.4x
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 $453.45 from 37 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $434.56 per share.
Warnings
Stock-based employee pay equals 48% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
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