Why Tyler Technologies Stock Is Sinking Today
Shares of leading public sector software company Tyler Technologies (NYSE: TYL) are down 15% as of noon ET on Thursday after the company reported fourth-quarter earnings. Sales and adjusted net income grew 6% and 8% during Q4, but fell well short of Wall Street's consensus. Management guided for 8% sales growth in 2026 -- a far cry from its 15% annualized growth rate over the last five years. On top of these underwhelming results, the software industry remains in turmoil as the market weighs which SaaS companies will be most disruptible by AI. This industrywide threat and Tyler's disappointing results have sent the stock down 55% from its 52-week high.
While it makes sense for an AI-enamored market to pare back expectations for many software stocks, I think its reaction to Tyler Technologies' stock has gone too far. Serving a wide array of customers across the public sector -- local, state, and federal governments, corrections facilities, schools, public safety offices, etc. -- Tyler probably isn't as disruptible as most SaaS stocks. These are highly regulated areas that require strict security standards, protecting Tyler's leadership position in the niche. Furthermore, there isn't much incentive for government employees to develop new apps or processes that could displace the company over the long haul.
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Source Fool.com
