Analyzing Shopify (NYSE:SHOP) & Tyler Technologies (NYSE:TYL)

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

Risk and Volatility

Shopify has a beta of 2.66, meaning that its stock price is 166% more volatile than the S&P 500. Comparatively, Tyler Technologies has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Shopify and Tyler Technologies, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shopify	1	14	26	2	2.67
Tyler Technologies	0	3	10	0	2.77

Shopify presently has a consensus target price of $115.37, indicating a potential upside of 25.71%. Tyler Technologies has a consensus target price of $674.67, indicating a potential upside of 20.46%. Given Shopify’s higher possible upside, equities analysts plainly believe Shopify is more favorable than Tyler Technologies.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Shopify	22.74%	12.00%	9.79%
Tyler Technologies	12.30%	10.15%	6.63%

Institutional and Insider Ownership

69.3% of Shopify shares are owned by institutional investors. Comparatively, 93.3% of Tyler Technologies shares are owned by institutional investors. 1.1% of Tyler Technologies shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Shopify and Tyler Technologies”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shopify	$8.88 billion	13.38	$2.02 billion	$1.55	59.21
Tyler Technologies	$2.19 billion	11.03	$263.03 million	$6.64	84.35

Shopify has higher revenue and earnings than Tyler Technologies. Shopify 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

Shopify beats Tyler Technologies on 10 of the 15 factors compared between the two stocks.

About Shopify

Shopify Inc., a commerce company, provides a commerce platform and services in Canada, the United States, Europe, the Middle East, Africa, the Asia Pacific, Australia, China, and Latin America. The company’s platform enables merchants to displays, manages, markets, and sells its products through various sales channels, including web and mobile storefronts, physical retail locations, pop-up shops, social media storefronts, native mobile apps, buy buttons, and marketplaces; and enables to manage products and inventory, process orders and payments, fulfill and ship orders, new buyers and build customer relationships, source products, leverage analytics and reporting, manage cash, payments and transactions, and access financing. It also sells custom themes and apps, and registration of domain names; and merchant solutions, which include accepting payments, shipping, and securing working capital. The company was formerly known as Jaded Pixel Technologies Inc. and changed its name to Shopify Inc. in November 2011. Shopify Inc. was incorporated in 2004 and is headquartered in Ottawa, Canada.

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.