Tyler Technologies TYL is scheduled to report third-quarter 2024 results after market close on Oct. 23.
The Zacks Consensus Estimate for third-quarter earnings is pegged at $2.44 per share, indicating an increase of 14% from the year-ago quarter, unchanged over the past 60 days. The consensus mark for revenues is pegged at $546.4 million, suggesting a 10.5% increase from the year-ago quarter.
TYL’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 5.3%.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Factors to Consider
Tyler’s third-quarter revenues are likely to have been driven by the demand for its subscription-based software-as-a-service (SaaS) products as the public sector continues to shift from on-premise and backdated systems to scalable cloud-based frameworks. Our estimate for the company’s third-quarter Subscription segment revenues is pegged at $349.7 million, indicating a year-over-year increase of 18.5%.
Nevertheless, public sector entities’ transition to SaaS at an accelerated pace is likely to have affected TYL’s Software Licenses and Royalties segment revenues. Our estimate for the segment’s third-quarter revenues is pegged at $10.1 million, indicating a 4.8% year-over-year decline.
Our estimate for Professional Services third-quarter revenues is pinned at $65.7 million, indicating year-over-year growth of 7.5%. Our estimate of $109 million for the Maintenance segment’s third-quarter revenues suggests a year-over-year decrease of 7.2%.
Tyler Technologies, Inc. Price and EPS Surprise
Tyler Technologies, Inc. price-eps-surprise | Tyler Technologies, Inc. Quote
Overall, our estimate for the company’s Total Subscriptions, Professional Services and Maintenance revenues, which include all the four abovementioned segments, is pegged at $524.4 million. The figure indicates a year-over-year increase of 10.7%.
Tyler Technologies’ recent contract win of the Self-Funded eGovernment Application and Services contract from the state of New Jersey for its digital government solutions is expected to have benefited the quarter under review. TYL’s collaboration with the North Dakota Parks & Recreation Department aimed at streamlining digital services for its visitors is expected to have aided third-quarter performance.
Additionally, TYL’s acquisitions of two businesses in the past 12 months, namely ARInspect and ResourceX, are expected to have contributed to its top line during the third quarter.
However, macroeconomic and geopolitical risks might have negated Tyler Technologies’ business during the third quarter. Still-high interest rates and persistent inflationary conditions are expected to have led public sectors to postpone procurement processes and lengthen sales cycles, which might have hurt TYL’s top line in the quarter under review.
The acceleration in the shift to the cloud in the new business and the related decline in license revenues are likely to have weighed on operating margins.
What Our Model Says
According to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
TYL has an Earnings ESP of 0.00% and carries a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some stocks worth considering, as our model shows that they have the right combination of elements to beat on earnings this reporting cycle.
Arista Networks ANET has an Earnings ESP of +0.96% and carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arista Networks’ shares have surged 70.7% year to date. ANET is slated to report its third-quarter 2024 results on Nov. 7.
The Zacks Consensus Estimate for ANET’s third-quarter 2024 earnings is pegged at $2.08 per share, unchanged over the past 60 days. This suggests an improvement of 13.7% from the year-ago quarter’s reported figure.
Onto Innovation ONTO has an Earnings ESP of +2.74% and a Zacks Rank #2 at present.
ONTO shares have gained 37.1% year to date. It is slated to release third-quarter 2024 results on Oct. 31.
The Zacks Consensus Estimate for ONTO’s earnings is pegged at $1.31 per share, up by a couple of pennies over the past 60 days. This indicates growth of 36.5% from the year-ago quarter’s reported figure.
Uber Technologies UBER has an Earnings ESP of +50.00% and a Zacks Rank #2 at present. Uber Technology’s shares have gained 28.5% year to date. UBER is set to report third-quarter 2024 results on Oct. 31.
The Zacks Consensus Estimate for UBER’s third-quarter 2024 earnings is pegged at 41 cents per share, up by a couple of pennies for the past 60 days, indicating an improvement of 310% from the year-ago quarter’s reported figure.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
