Tyler Technologies (TYL) is in focus after reporting second quarter 2026 results and updating investors on a sizable share repurchase program, providing fresh data points to assess the stock.

The earnings beat and expanded buyback plan have come after a mixed stretch for Tyler Technologies, with a 17.3% 7 day share price return and its 1 year total shareholder return down 39.87% at a recent price of $333.50. That pattern suggests short term momentum is picking up even though longer term holders have seen weaker results.

If this update has you thinking about where else growth and re rating stories could emerge, it may be worth scanning for other software driven businesses with steady fundamentals across the market using the 19 top founder-led companies

The share price rebound and fresh buyback plan at Tyler Technologies put a practical question in front of you. Is this the moment to step in after a pullback, or does it make more sense to wait for a cheaper entry based on valuation?

Most Popular Narrative: 130% Overvalued

Tyler Technologies is trading at $333.50 against a fair value estimate of $144.97 in the most followed valuation narrative, which sets up a sharp gap between market price and that framework.

Tyler Technologies is the dominant software platform for U.S. state and local government, a market defined by mission-critical workflows, 12 to 24 month implementation cycles, and a procurement environment that structurally protects incumbents. The investment thesis is built on three compounding forces: (1) a largely complete SaaS cloud transition that is converting a high-gross-margin subscription base from flat to accelerating, with ARR already at $2.06B and growing 11% annually; (2) a payments platform (NIC) that turns Tyler’s 40,000+ client relationships into a recurring transaction revenue stream now generating $808M per year and growing at double digits; and (3) a Tyler 2030 strategic roadmap that articulates a credible path to 30%+ non-GAAP operating margins by the end of the decade.

Curious how that fair value tries to square a strong public sector position with a much lower price tag than today. The narrative leans on subscription scale, payments throughput and margin ambitions over the coming decade. Want to see which revenue and cash flow patterns underpin that conclusion and how sensitive the outcome is to those inputs.

Result: Fair Value of $144.97 (OVERVALUED)

However, Tyler Technologies still faces risks around capital allocation discipline and the pace of its on premises to cloud migration, which could challenge this narrative.

Another View: Tyler Technologies Through a DCF Lens

While the popular narrative pegs Tyler Technologies at $144.97 and labels the stock overvalued, the SWS DCF model points in a different direction. It estimates fair value at $548.60, which is 39.2% above the current $333.50 share price and flags the stock as undervalued. Which framework do you find more convincing for your own process?

For a closer look at how this cash flow based view is built, including the key assumptions and sensitivities that matter most, Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Tyler Technologies for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 49 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

Given the mixed signals around Tyler Technologies, this is a good moment to look at the underlying data yourself and reach your own judgment. If you want a quick way to see what is currently attracting optimism, start with the 4 key rewards.

Looking for more investment ideas beyond Tyler Technologies?

If Tyler Technologies has sharpened your thinking, do not stop here. Broader context across other stocks can help you test your thesis and refine your watchlist.

• Spot potential mispricings early by scanning 49 high quality undervalued stocks that pair healthy fundamentals with prices that may not fully reflect their financial profile.
• Strengthen your income options by reviewing 9 dividend fortresses that focus on companies offering higher yields with supporting fundamentals.
• Prioritise resilience by checking 85 resilient stocks with low risk scores that emphasise stocks with more stable risk characteristics and sturdier balance sheets.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.