Critical Survey: Tyler Technologies (NYSE:TYL) and Smartsheet (NYSE:SMAR)

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

Risk and Volatility

Tyler Technologies has a beta of 0.76, indicating that its share price is 24% less volatile than the S&P 500. Comparatively, Smartsheet has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500.

Insider & Institutional Ownership

93.3% of Tyler Technologies shares are owned by institutional investors. Comparatively, 90.0% of Smartsheet shares are owned by institutional investors. 2.2% of Tyler Technologies shares are owned by company insiders. Comparatively, 4.5% of Smartsheet shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Tyler Technologies	11.39%	9.79%	6.34%
Smartsheet	-0.80%	2.33%	1.12%

Earnings and Valuation

This table compares Tyler Technologies and Smartsheet”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tyler Technologies	$2.08 billion	12.09	$165.92 million	$5.48	107.14
Smartsheet	$1.08 billion	7.24	-$104.63 million	($0.06)	-933.00

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

Analyst Recommendations

This is a summary of current recommendations for Tyler Technologies and Smartsheet, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tyler Technologies	0	2	12	0	2.86
Smartsheet	1	17	2	0	2.05

Tyler Technologies presently has a consensus price target of $642.62, indicating a potential upside of 9.46%. Smartsheet has a consensus price target of $55.82, indicating a potential downside of 0.28%. Given Tyler Technologies’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Tyler Technologies is more favorable than Smartsheet.

Summary

Tyler Technologies beats Smartsheet on 13 of the 14 factors compared between the two stocks.

About Tyler Technologies

Tyler Technologies, Inc. provides integrated information management solutions and services for the public sector. It operates in two segments, Enterprise Software and Platform Technologies. The company offers platform and transformative technology solutions, including cybersecurity for government agencies; data and insights solutions; digital solutions that helps workers and policymakers to share, communicate, and leverage data; payments solutions, such as billing, presentment, merchant onboarding, collections, reconciliation, and disbursements; platform technologies, an application development platform that enables government workers to build solutions and applications; and outdoor recreation solutions, including campsite reservations, activity registrations, licensing sales and renewals, and real-time data for conservation and park management. It also provides public administration solutions, such as civic services; financial applications with human resources, revenue management, tax billing, utilities, asset management, and payment processing; property and recording service that manages appraisal services, valuation, tax billing and collections, assessment administration, and land and official records; and permitting, licensing, and regulatory management solutions. In addition, the company offers courts and public safety solutions; school ERP and student transportation solutions for K-12 schools; and health and human services solutions. Further, the company offers software as a service arrangements and electronic document filing solutions for courts; software and hardware installation, data conversion, training, product modification, and maintenance and support services; and property appraisal outsourcing services for taxing jurisdictions. Tyler Technologies, Inc. has a strategic collaboration agreement with Amazon Web Services for cloud hosting services. The company was founded in 1966 and is headquartered in Plano, Texas.

About Smartsheet

Smartsheet, Inc. engages in managing and automating collaborative work. Its platform provides solutions that eliminate the obstacles to capturing information, including a familiar and intuitive spreadsheet interface as well as easily customizable forms. The company was founded by W. Eric Browne, Maria Colacurcio, John D. Creason and Brent R. Frei in June 2005 and is headquartered in Bellevue, WA.