On this episode of Stock Spotlight, Michael shines the spotlight on Tyler Technologies ($TYL), the largest pure-play provider of public sector software. Think of Tyler as the “operating system of state & local governments” — powering tax collection, court systems, payroll, permitting, and digital citizen services across 13,000+ client sites. With 98% retention and 85% recurring revenue, it’s a mission-critical business that governments simply can’t run without.
Michael breaks down why Tyler scored a modest 53% on his Quality Checklist and a decent 6/9 on the Quality Growth Profile, how SaaS migration and payments (via its NIC acquisition) provide secular tailwinds, and why its 2030 roadmap — 90%+ recurring revenue and margin expansion — may prove both ambitious and achievable. He also walks through key KPIs to track, from SaaS mix to adjusted ROIC and explains why valuation remains the biggest sticking point: a $520 share price vs. ~$320 fair value in his DCF. Hear why Tyler stays on the watch list for now and why the $450–$480 technical support zone could provide a more attractive entry.
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00:00 Intro
00:38 Investment Checklist & Database
01:41 Business Overview
12:30 Industry Overview
17:42 Quality Growth Profile
20:39 Financial Statement Overview
28:08 Leadership & Incentives
35:00 KPIs to Track
36:39 Valuation & Technical Analysis
42:17 Verdict
44:12 Outro
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Intro Music: Andrey Rossi – Seize the Day
Outro Music: Ra – Prospect
*Music provided by Uppbeat Premium
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Disclosure: The host of Stock Spotlight is not a licensed financial advisor. The information and opinions shared during the show are for entertainment purposes only.
