Investors braced for a bumpy ride ahead of Tyler Technologies' (NYSE: TYL) earnings announcement as the company has wavered between beating and falling short of analyst predictions during the past fiscal year. The company will unveil its latest earnings Wednesday. Tyler Technologies develops and markets a line of software solutions and services to address the information technology needs of cities, counties, schools and other local government entities.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Tyler Technologies, with four of five analysts rating it hold. Analysts don't like Tyler Technologies as much as competitor EPIQ Systems overall. One out of four analysts rate EPIQ Systems a buy compared with one of five for Tyler Technologies. Analysts haven't adjusted their rating of Tyler Technologies for the past three months.
  • Revenue forecasts: On average, analysts predict $77 million in revenue this quarter. That would represent a rise of 6% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.18 per share. Estimates range from $0.17 to $0.19.

What our community says:
CAPS All-Stars are solidly behind the stock, with 100% assigning it an "outperform" rating. The community at large backs the All-Stars, with 95.8% awarding it a rating of "outperform." Fools are bullish on Tyler Technologies, though the message boards have been quiet lately with only 16 posts in the past 30 days. Tyler Technologies has a bullish CAPS rating of five out of five stars that is on par with the Fool community assessment.

Management:
Tyler Technologies' profit has risen year over year by an average of 1.7%. A year-over-year revenue increase last quarter snaps a streak of two consecutive quarters of revenue declines. Revenue rose 5.1% in the first quarter and fell 2.4% in the fourth quarter of the last fiscal year and 0.8% in the third quarter of the last fiscal year.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q1

Q4

Q3

Q2

Gross Margin

44.4%

45%

45%

44.7%

Operating Margin

13.6%

15.4%

16%

14.4%

Net Margin

7.8%

10%

9.1%

8.6%

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