JPMorgan started Tyler Technologies (NYSE:TYL) at Overweight with a price target of $472 per share in a note Wednesday.
The firm's analysts stated that the domestic software provider focused on the public sector is an "attractive opportunity down the pipe."
"Many governments are running outdated systems which are overdue to modernize: this creates a strong secular tailwind," explained the analysts.
"We like Tyler's investment case, as the company is a clear market leader and has a large install base (servicing ~15k entities with a 98% gross retention) that it is likely to leverage, guiding that most of the ~9% 3Y revenue CAGR will come from cross-sell."
The analysts added that Tyler is profitable and prioritizes offering SaaS solutions, which "should drive recurring revenue share to 90%+ (vs. 84% today)." In addition, they noted that there is "steady demand for software upgrades" and further expansion opportunities for the company.