Tyler Technologies: Depressed Valuation, Improving SaaS Bookings Outlook, and Public Sector AI Tailwinds Support Needham Top Pick Buy Rating for 2026

In a report released today, Joshua Reilly from Needham maintained a Buy rating on Tyler Technologies, with a price target of $750.00.

Joshua Reilly has given his Buy rating due to a combination of factors that, in his view, materially improve Tyler Technologies’ risk‑reward profile heading into 2026. He highlights that the main drag on the stock’s valuation in 2025—muted new SaaS bookings and ARR growth—should ease as the company laps tougher comparisons and has a clearer runway to secure larger contracts next year. With the shares trading at their lowest valuation in roughly a decade and at about half of their recent five‑year EV/FCF average, he sees substantial room for the multiple to expand if operational execution improves.

Reilly also underscores that any incremental positive news on deal flow, starting as early as the upcoming Q4 earnings release, is likely to act as a meaningful catalyst for the stock. His industry checks suggest that demand for public sector technology remains resilient and could strengthen further in 2026 as government customers increasingly deploy adjacent AI-enabled applications. This potential demand uptick, combined with a depressed starting valuation and clearer visibility on bookings recovery, underpins his conviction in recommending Tyler Technologies as a Buy and naming it Needham’s top pick for 2026.