Is Tyler Technologies (TYL) Still a Worthy Investment Pick?

Andvari Associates, an investment management firm, published its first-quarter 2022 investor letter – a copy of which can be downloaded here. During the past quarter, Andvari, unfortunately, underperformed the S&P 500. For the first quarter of 2022 Andvari was down 15.5% net of fees while the S&P 500 was down 4.6%. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.

In its Q1 2022 investor letter, Andvari Associates mentioned Tyler Technologies Inc. (NYSE:TYL) and explained its insights for the company. Founded in 1966, Tyler Technologies Inc. (NYSE:TYL) is a Plano, Texas-based software company with a $13.0 billion market capitalization. Tyler Technologies Inc. (NYSE:TYL) delivered a -41.42% return since the beginning of the year, while its 12-month returns are down by -28.94%. The stock closed at $315.11 per share on June 22, 2022.

Here is what Andvari Associates has to say about Tyler Technologies Inc. (NYSE:TYL) in its Q1 2022 investor letter:

“The assets most impacted by higher rates are companies with fast growth rates, high returns, or very high shareholder expectations. Most of the companies in Andvari’s portfolio have one or several of these qualities. We’ve thus had poor performance relative to the market.

For example, Tyler Technologies (NYSE:TYL) is a software company focused on the state and local government vertical. The company has grown revenues over the last decade at a 17.8% annualized rate. Operating margins have ranged from 18% to 23% and can go much higher. The market has recognized the quality of Tyler’s business by putting an extremely high multiple on what it is likely to earn over the next year. Tyler traded at 48x EBITDA at the beginning of the year. It now trades at 37x EBITDA. Tyler’s share price went down 17.3% in the quarter versus the market being down 4.6%.”


Our calculations show that Tyler Technologies Inc. (NYSE:TYL) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Tyler Technologies Inc. (NYSE:TYL) was in 28 hedge fund portfolios at the end of the first quarter of 2022, compared to 33 funds in the previous quarter. Tyler Technologies Inc. (NYSE:TYL) delivered a -26.38% return in the past 3 months.

In May 2021, we also shared another hedge fund’s views on Tyler Technologies Inc. (NYSE:TYL) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

Disclosure: None. This article is originally published at Insider Monkey.