Tyler Technologies scores 74 for management and 91 for moat. The management score rests on a return on invested capital of 6.4% and a gross margin of 44.0% — figures that describe a business earning a respectable return on what it employs. Debt sits at 0.18x equity. A wide moat alongside strong management is a combination worth understanding before the price matters at all.
The price anchors are built on deliberately conservative assumptions. Growth is modelled at 15.0% a year, below the 16.0% actually measured over the last decade — the model caps growth rather than extrapolating a good run forwards. The exit multiple assumed is 30.0x. That produces an intrinsic value of $226.20, a 10-CAP price of $171.84 and a payback time price of $271.27, with the value zone set at the highest of the three, $271.27. Today's price of $330.18 sits 22% above it.
A wonderful business at the wrong price is still the wrong price. Tyler Technologies scores well on the business and poorly on the entry point, which is the most common shape in a long bull market.
| Price | $330.18 |
| Market cap | $13.5B |
| P/E ratio | 43.8x |
| Return on invested capital | 6.4% |
| Gross margin | 44.0% |
| Debt to equity | 0.18x |
| Free cash flow yield | 3.3% |
| Growth rate used | 15.0% |
| Growth rate measured | 16.0% |
| Exit multiple assumed | 30.0x |
| Company | Moat | Buy price |
| Guidewire Software Inc (GWRE) | 65 | $55.26 |
| Fair Isaac (FICO) | 80 | $528.01 |
| Manhattan Associates Inc (MANH) | 90 | $97.93 |
| HubSpot Inc. (HUBS) | 98 | $247.62 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of Tyler Technologies rather than accepting ours.