Why Tyler Technologies Stock Slipped on Monday

Tyler Technologies (NYSE: TYL) was given the cold shoulder by analysts on the first trading day of the week. On the back of an analyst's price cut, the company's share price eroded, although not by an alarming figure. It declined 0.6% for an uninspiring performance, considering the S&P 500's (SNPINDEX: ^GSPC) marginal (less than 0.1%) Monday rise.

Snip, snip

That was roughly proportionate with the cut enacted by Wells Fargo's Michael Turrin. He shaved $20 off his Tyler price target for a new fair-value assessment of $590 per share. In doing so, he maintained his equal weight (read: hold) recommendation on the specialty tech stock.

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The reasons for Turrin's move weren't immediately clear. Analysts often make tweaks to their stock evaluations after earnings; this one closely follows Tyler's latest earnings release. Last week, the company unveiled its first-quarter results, posting revenue that grew 10% year over year to $565 million, and non-GAAP (generally accepted accounting principles) adjusted net income that ballooned by nearly 30% to $122 million.

Both headline figures convincingly beat analyst estimates, as did bottom-line guidance for the entirety of 2025. Management attributed the improvements to strong growth in revenue for the company's software-as-a-service (SaaS) offerings, among other products.

A relatively harmless cut

It can be hard for ambitious tech companies to impress investors, who often expect lofty growth numbers for a number of years. I don't think Tyler investors should be discouraged by this fresh price target cut -- the company looks solid fundamentally and attractively priced. In short, I'd be more bullish on its potential than Turrin is.

Wells Fargo is an advertising partner of Motley Fool Money. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tyler Technologies. The Motley Fool has a disclosure policy.