Tyler Technologies (NYSE:TYL) & Bottomline Technologies (NYSE:EPAY) Critical Review

Tyler Technologies (NYSE:TYL) and Bottomline Technologies (NASDAQ:EPAY) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, dividends, risk, profitability, institutional ownership and earnings.

Insider & Institutional Ownership

88.1% of Tyler Technologies shares are owned by institutional investors. Comparatively, 88.7% of Bottomline Technologies shares are owned by institutional investors. 4.4% of Tyler Technologies shares are owned by insiders. Comparatively, 2.6% of Bottomline Technologies shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Tyler Technologies and Bottomline Technologies, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tyler Technologies 0 2 6 0 2.75
Bottomline Technologies 0 1 4 1 3.00

Tyler Technologies currently has a consensus price target of $268.43, suggesting a potential downside of 2.09%. Bottomline Technologies has a consensus price target of $58.92, suggesting a potential upside of 39.78%. Given Bottomline Technologies’ stronger consensus rating and higher possible upside, analysts plainly believe Bottomline Technologies is more favorable than Tyler Technologies.

Risk and Volatility

Tyler Technologies has a beta of 0.86, suggesting that its stock price is 14% less volatile than the S&P 500. Comparatively, Bottomline Technologies has a beta of 1, suggesting that its stock price has a similar volatility profile to the S&P 500.

Profitability

This table compares Tyler Technologies and Bottomline Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tyler Technologies 12.63% 11.51% 8.40%
Bottomline Technologies 2.24% 6.07% 3.47%

Valuation and Earnings

This table compares Tyler Technologies and Bottomline Technologies’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Tyler Technologies $935.28 million 11.43 $147.46 million $3.74 73.30
Bottomline Technologies $421.96 million 4.39 $9.43 million $0.97 43.45

Tyler Technologies has higher revenue and earnings than Bottomline Technologies. Bottomline Technologies is trading at a lower price-to-earnings ratio than Tyler Technologies, indicating that it is currently the more affordable of the two stocks.

Summary

Tyler Technologies beats Bottomline Technologies on 9 of the 15 factors compared between the two stocks.

Tyler Technologies Company Profile

Tyler Technologies, Inc. provides integrated information management solutions and services for the public sector in the United States and internationally. The company operates in two segments, Enterprise Software, and Appraisal and Tax. It offers financial management solutions, including modular fund accounting systems for government agencies or not-for-profit entities; utility billing systems for the billing and collection of metered and non-metered services; products to automate city and county functions, such as municipal courts, parking tickets, equipment and project costing, animal and business licenses, permits and inspections, code enforcement, citizen complaint tracking, ambulance billing, fleet maintenance, and cemetery records management; and student information and transportation solutions for K-12 schools. The company also provides a suite of judicial solutions comprising court case management, court and law enforcement, prosecutor, and supervision systems to handle multi-jurisdictional county or statewide implementations, and single county systems; public safety software solutions; systems and software to automate the appraisal and assessment of real and personal property, as well as tax applications for agencies that bill and collect taxes; planning, regulatory, and maintenance software solutions for public sector agencies; software applications to enhance and automate land and other records and document management; and data and insights solutions. In addition, it offers software as a service arrangements and electronic document filing solutions for courts and law offices; software and hardware installation, data conversion, training, product modification, and maintenance and support services; and property appraisal outsourcing services for taxing jurisdictions. The company was founded in 1966 and is based in Plano, Texas.

Bottomline Technologies Company Profile

Bottomline Technologies (de), Inc. provides software as a service based solutions. It operates through four segments: Cloud Solutions, Banking Solutions, Payments and Transactional Documents, and Other. The company's products and services include Paymode-X, a cloud-based payment network, which allows businesses to transition to electronic integrated payables; and cloud-based financial messaging solutions that enable banks and corporations to exchange financial information, such as payment instructions, cash reporting, and other messages to facilitate transaction settlement. It also provides digital banking solutions that provide payments, cash management, and online banking solutions to financial institutions; and cloud-based legal spend management solutions and services that integrate with claims management, and time and billing systems to automate legal invoice management processes. In addition, the company offers cyber fraud and risk management solutions that monitor, replay, and analyze user behavior and payment transactions to flag and stop suspicious activity in real time; and payment and document automation solutions to automate a range of business documents and supply chain processes, as well as related Web-based delivery and document archive. Further, it provides healthcare solutions for patient registration, electronic signature, mobile document, and payments; and consulting, project implementation, and training services, as well as sells printers, check papers, and magnetic ink character recognition toners. The company serves customers in the banking, financial services, insurance, healthcare, technology, retail, communications, education, media, manufacturing, and government industries in the United States, the United Kingdom, Continental Europe, the Asia-Pacific, and the Middle East. Bottomline Technologies (de), Inc. was founded in 1989 and is headquartered in Portsmouth, New Hampshire.

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