Tyler Technologies TYL is scheduled to report third-quarter 2021 results on Oct 27.
The Zacks Consensus Estimate for the third-quarter earnings is pegged at $1.74 per share, suggesting a year-over-year increase of 16%. Further, the consensus mark for revenues is pinned at $419.2 million, calling for a 46.6% increase from the year-ago quarter.
In the trailing four quarters, Tyler’s earnings beat the Zacks Consensus Estimate on three occasions and missed in the other, the average surprise being 7.7%.
In the last reported quarter, Tyler’s non-GAAP earnings of $1.83 per share surpassed the Zacks Consensus Estimate by 18 cents. Moreover, revenues of $405.47 million beat the consensus mark of $370.9 million.
Let’s see how things have shaped up for the upcoming announcement.
Tyler Technologies, Inc. Price and EPS Surprise
Tyler Technologies, Inc. price-eps-surprise | Tyler Technologies, Inc. Quote
Factors at Play
Tyler’s third-quarter performance is likely to have been benefited from big-value deals in public safety space. In addition, the company’s recently-closed acquisitions are anticipated to have brought in incremental revenues during the quarter under review.
Most recently, in September, it completed the acquisition of VendEngine for $84 million in cash. VendEngine is a privately-held company that focuses on providing cloud-based software to be used in correctional facilities. In the same month, it acquired Arx, a cloud-based software platform provider for the modern-day police force.
This April, Tyler completed the proposed acquisition of NIC Inc. to bank on the pandemic-induced shift to online services and electronic payments by governments. This buyout will likely be accretive to Tyler’s non-GAAP earnings, EBITDA, recurring revenue mix and free cash flow per share in 2021.
In the same month, Tyler purchased the cloud-based school scheduling platform, ReadySub, to expand and strengthen its school portfolio. In late March, the company announced the acquisition of DataSpec, a veterans’ claim management software firm, for an undisclosed amount. Apart from enhancing the client base, these acquisitions are anticipated to have created opportunities of cross selling for Tyler, thereby boosting its revenues during the third quarter.
However, the pandemic-induced economic and business disruptions are expected to have continued hurting the company’s top line during the period in discussion.
Delays in procurement processes and lengthening sales cycles, as the public sector entities are now more focused on the pandemic-related issues, might have hurt its revenues in the quarter under review.
Apart from this, higher employee healthcare expenses are expected to have clipped Tyler’s operating margins during the quarter to be reported.
What Our Model Says
Our proven model does not predict an earnings beat for Tyler this season. The combination of a positive Earnings ESP, and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.
Though Tyler currently carries a Zacks Rank of 3, it has an Earnings ESP of 0.00%.
Stocks With Favorable Combinations
Here are some companies, which, per our model, have the right combination of elements to post an earnings beat in their upcoming release:
Applied Materials AMAT has an Earnings ESP of +0.52% and currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Applied Micro Devices AMD has an Earnings ESP of +2.31% and carries a Zacks Rank #2, at present.
CACI International CACI has an Earnings ESP of +4.43% and holds a Zacks Rank of 2, currently.
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