Tyler Technologies

Methodology

Tyler Technologies' fair value calculation works well given the company's consistent earnings growth driven by recurring subscription revenue and steady expansion in local government software markets. The method captures Tyler's position as a high-quality compounder with predictable demand from municipalities upgrading legacy systems. Fair value estimates are reliable because the business model emphasizes long-term SaaS contracts with high retention and operates in a stable, recession-resistant end market.

Methodology

Tyler typically commands premium PEG ratios reflecting its position as the dominant provider of mission-critical software to local governments, with high switching costs and secular cloud migration tailwinds. The PEG framework works well for Tyler because growth rates are steady and supported by recurring revenue expansion, though investors should normalize for the impact of large on-premise-to-cloud migrations. Comparing Tyler's PEG to other vertical SaaS companies provides context for relative valuation within the government technology niche.

Methodology

Tyler pays no dividend, as management prioritizes reinvesting in product development and strategic acquisitions to expand the government software platform and accelerate cloud adoption. PEGY therefore equals PEG with no yield component, reflecting the company's growth-focused capital allocation strategy. For Tyler investors, evaluating cloud transition progress and new module adoption matters far more than dividend income.