Stifel has trimmed its price target for Tyler Technologies (NYSE:TYL) to $400 from $550, while retaining a Buy recommendation on the shares, according to a research note published Thursday. The adjustment accompanies a steep year-over-year decline for the stock, which has fallen more than 44% over the last twelve months and is trading near its 52-week low of $320.23.
Analyst Parker Lane framed the change as a response to Tyler's ongoing transition toward a more subscription-oriented revenue mix, with software-as-a-service gaining a larger share of total sales. That transition is occurring against a backdrop in which the company has nonetheless recorded 10.6% revenue growth over the past twelve months.
Despite lowering the price objective, Stifel maintained a constructive view of Tyler's long-term position. The research note described the company as a "long-term winner in the space" that is building a "healthier, more predictable model" as its SaaS business expands. Stifel's commentary underscores a balance between shorter-term valuation pressures and a favorable view of the company's evolving business model.
Independent financial measures cited in the note and associated analysis suggest Tyler retains solid underlying fundamentals. InvestingPro data referenced a high Altman Z-Score of 7.93 and a Piotroski Score of 7, signaling financial strength even as the share price has weakened.
The research note also flagged sector-wide uncertainty about artificial intelligence positioning that affects software companies broadly, including Tyler. Stifel said it expects Tyler to provide additional detail on its AI strategy at the company's analyst day scheduled later this year, and the firm will be watching for a more comprehensive outline at that event.
On the results front, Tyler Technologies reported fourth-quarter 2025 earnings that marginally missed analyst estimates on both earnings per share and revenue. The company posted earnings per share of $2.64, below the expected $2.72. Revenue for the quarter came in at $575.2 million, short of the $591.03 million forecast. The research note did not report any analyst upgrades or downgrades in response to those results, and the company has not announced any mergers or acquisitions at this time.
Investors will likely focus on how management addresses the recent earnings and revenue shortfalls going forward and how the shift toward SaaS will affect revenue recognition and predictability. Stifel's maintained Buy rating paired with a sharply lower price target reflects its view that the company's strategic transition presents both short-term valuation adjustments and longer-term upside if the move to subscription revenues proceeds as anticipated.
Key points
- Stifel cut Tyler Technologies' price target to $400 from $550 but kept a Buy rating.
- The company is shifting toward a greater share of revenue from SaaS while still reporting 10.6% revenue growth over the past year.
- Tyler missed Q4 2025 expectations with EPS of $2.64 and revenue of $575.2 million versus forecasts of $2.72 and $591.03 million, respectively.
Risks and uncertainties
- Sector-wide questions about AI positioning could influence investor sentiment and the competitive environment for software companies.
- Recent quarterly misses on both EPS and revenue highlight near-term execution risks tied to financial performance.
- The stock's steep decline and proximity to its 52-week low suggest heightened price volatility and market sensitivity.
Fields such as enterprise software and the broader technology sector are directly implicated by the developments noted in Stifel's note. Public markets that price subscription-oriented software companies will be watching both Tyler's execution on its SaaS transition and any clarity the company provides about AI integration at its analyst day.