Financial Analysis: Ringcentral (NYSE:RNG) and Tyler Technologies (NYSE:TYL)

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

Earnings & Valuation

This table compares Ringcentral and Tyler Technologies”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ringcentral	$2.40 billion	1.14	-$58.29 million	($0.14)	-215.75
Tyler Technologies	$2.14 billion	10.56	$263.03 million	$7.00	74.54

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

Volatility & Risk

Ringcentral has a beta of 1.32, meaning that its stock price is 32% more volatile than the S&P 500. Comparatively, Tyler Technologies has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Ringcentral and Tyler Technologies, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ringcentral	1	9	4	0	2.21
Tyler Technologies	0	3	8	0	2.73

Ringcentral presently has a consensus target price of $30.62, indicating a potential upside of 1.36%. Tyler Technologies has a consensus target price of $688.27, indicating a potential upside of 31.91%. Given Tyler Technologies’ stronger consensus rating and higher probable upside, analysts plainly believe Tyler Technologies is more favorable than Ringcentral.

Institutional and Insider Ownership

98.6% of Ringcentral shares are held by institutional investors. Comparatively, 93.3% of Tyler Technologies shares are held by institutional investors. 7.0% of Ringcentral shares are held by company insiders. Comparatively, 1.1% of Tyler Technologies shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ringcentral	-0.50%	-19.63%	6.10%
Tyler Technologies	13.66%	10.34%	6.87%

Summary

Tyler Technologies beats Ringcentral on 10 of the 14 factors compared between the two stocks.

About Ringcentral

RingCentral, Inc., together with its subsidiaries, provides cloud communications, video meetings, collaboration, and contact center software-as-a-service solutions worldwide. The company’s products include RingCentral Message Video Phone that provides a unified experience for communication and collaboration across multiple modes, including HD voice, video, SMS, messaging and collaboration, conferencing, online meetings, and fax; RingCentral Contact Center, a collaborative contact center solution that delivers AI-powered omnichannel and workforce engagement solutions with integrated RingCentral MVP; and RingCX, an AI-powered contact center that a native delivers omnichannel experience. It provides RingCentral Video, a video meeting service that includes the company’s RCV video and team messaging capabilities; offers video and audio conferencing, team messaging, file sharing, contact, task, and calendar management, as well as pre-meeting, in-meeting, and post-meeting capabilities. In addition, the company offers RingCentral Professional Services, which include consultation, UCaaS and CCaaS implementation, VoIP phone system adoption, configuring custom workflows, customer and user onboarding, ongoing support, advanced support, managed services, and more. It serves a range of industries, including financial services, education, healthcare, legal services, real estate, retail, technology, insurance, construction, hospitality, state and local government, and others. It sells its products to enterprise customers, as well as small and medium-sized businesses through resellers and distributors, partners, and global service providers. RingCentral, Inc. was incorporated in 1999 and is headquartered in Belmont, California.

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.