DCF Studio

    TYL · NYQ · Technology

    Tyler Technologies, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 118.75

    Market price

    USD 403.94

    Implied upside

    -70.6%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedReported capital expenditure averages 2.29% of revenue against depreciation of 7.88%. A business cannot depreciate more than it invests indefinitely. Capex has been set to 7.88% of revenue so the forecast is not handed free growth. Override it if the reported figure is right.

    Current EV/EBITDA of 30.9x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 118.75-70.6%
    Exit multiple
    USD 251.24-37.8%
    Market price
    USD 403.94

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0m156m312mFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 2.6bnUSD 2.8bnUSD 3.1bnUSD 3.3bnUSD 3.5bnUSD 3.8bnUSD 4.0bnUSD 4.1bnUSD 4.3bnUSD 4.4bn+6.2%
    EBITUSD 332.4mUSD 365.4mUSD 398.2mUSD 430.4mUSD 461.1mUSD 489.7mUSD 515.6mUSD 538.0mUSD 556.5mUSD 570.4m+6.2%
    NOPATUSD 281.0mUSD 308.8mUSD 336.6mUSD 363.8mUSD 389.7mUSD 413.9mUSD 435.8mUSD 454.8mUSD 470.3mUSD 482.1m+6.2%
    Add depreciation & amortisationUSD 201.0mUSD 220.9mUSD 240.8mUSD 260.2mUSD 278.8mUSD 296.1mUSD 311.7mUSD 325.3mUSD 336.5mUSD 344.9m+6.2%
    Less capital expenditureUSD -201.0mUSD -231.4mUSD -263.5mUSD -297.1mUSD -331.5mUSD -366.1mUSD -400.1mUSD -432.9mUSD -463.7mUSD -491.6m+10.4%
    Capex, % of revenue7.9%8.3%8.6%9.0%9.4%9.7%10.1%10.5%10.9%11.2%-
    Less increase in working capitalUSD -48.5mUSD -56.2mUSD -56.0mUSD -54.7mUSD -52.3mUSD -48.8mUSD -44.1mUSD -38.3mUSD -31.4mUSD -23.7m-7.7%
    Free cashflow to firmUSD 232.4mUSD 242.2mUSD 257.9mUSD 272.1mUSD 284.7mUSD 295.2mUSD 303.3mUSD 308.9mUSD 311.7mUSD 311.7m+3.3%
    Discount factor0.96130.88830.82090.75860.70100.64780.59860.55320.51120.4724-
    Present valueUSD 223.4mUSD 215.2mUSD 211.7mUSD 206.4mUSD 199.5mUSD 191.2mUSD 181.6mUSD 170.8mUSD 159.3mUSD 147.2m-
    Present Value Of The ForecastUSD 1.9bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.820Reported 0.732, pulled toward 1.0 (Blume)
    Cost of equity8.36%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 71.6x interest cover. Book interest / average debt was lower, at 0.8%.
    Market capitalisationUSD 16.1bn96.2% of capital
    Total debtUSD 642.6m3.8% of capital, book value as a proxy
    Tax rate15.5%Effective, capped at statutory
    WACC8.21%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 118.75

    60% of EV

    Forecast FCFF, final year
    USD 311.7m
    Capex at depreciation, working capital in reinvestment
    USD 482.1m
    Less reinvestment at g/ROIC (30.4% of NOPAT)
    USD -146.7m
    Capitalised
    USD 335.4m
    ROIC (WACC floor)
    8.2%
    Terminal value, undiscounted
    USD 6.0bn
    Terminal value, discounted
    USD 2.8bn
    Enterprise value
    USD 4.7bn
    Less net debt
    USD -454.6m
    Equity value
    USD 5.2bn

    Exit at 20.0x EBITDA

    Value per shareUSD 251.24

    82% of EV

    Terminal value, undiscounted
    USD 18.3bn
    Terminal value, discounted
    USD 8.6bn
    Enterprise value
    USD 10.6bn
    Less net debt
    USD -454.6m
    Equity value
    USD 11.0bn

    Spread between methods: 72%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    6.21%161.30159.17157.03154.90152.76
    7.21%138.65136.92135.18133.44131.71
    8.21%121.63120.19118.75117.30115.86
    9.21%108.39107.18105.96104.75103.53
    10.21%97.8296.7995.7594.7193.67

    Outlined: this model. Green text: above today's price of 403.94. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year8.0%6.5%24.1%
    EBIT margin15.3%13.0%45.1%
    Discount rate-8.2%3.8%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.