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Tyler Technologies, Inc. (TYL) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Tyler Technologies, Inc. (TYL)

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Intrinsic Value (DCF)

Current$452.00
→
Intrinsic$409.02
-10%
$279.49$409.02$654.95
Market implies 23% growth for 5 years
TYL appears fairly valued — current price aligns with our DCF estimate.
At $452, the market prices in continued strong cash flow growth (23%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $279 → Bull $655. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →16%18%20%22%
8%$498$539$583$630
10%$351$379$409$441
12%$269$290$313$337
14%$217$234$252$270

Bull Case

  • Bull case ($655) offers 45% upside at 24% growth, 9% discount

Bear Case

  • Bear case ($279) implies 38% downside at 16% growth, 12% discount
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5-Year Free Cash Flow Projection

Year 1$724.92M
Year 2$869.90M
Year 3$1.04B
Year 4$1.25B
Year 5$1.50B
Terminal$22.12B

📐 Model Inputs

Growth Rate20.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$604.10MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is TYL stock undervalued or overvalued?
🟡 FAIRLY VALUED

TYL trades at $452.00, within 10% of our $409.02 intrinsic value estimate. At 10.0% WACC and 20.0% FCF growth, the market is pricing in assumptions roughly aligned with the 5-year historical CAGR. The valuation range spans $269.12 (bear) to $615.05 (bull).

What is TYL's intrinsic value?

Using a 5-year DCF model: Base FCF of $604M, projected at 20.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $-106M net debt and dividing by 0.04B shares: Bear $269.12 | Base $409.02 | Bull $615.05. Current price $452.00 implies -8% to base case.

How is TYL's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 20.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($17.68B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 29.3x.