Tyler Technologies (NYSE:TYL) & Zscaler (NASDAQ:ZS) Head to Head Contrast

Zscaler (NASDAQ:ZS) and Tyler Technologies (NYSE:TYL) are both large-cap technology companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, analyst recommendations, risk, dividends, earnings, institutional ownership and profitability.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Zscaler	$3.35 billion	9.40	-$63.18 million	($0.39)	-495.44
Tyler Technologies	$2.33 billion	7.22	$315.60 million	$7.94	53.32

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Zscaler	-1.88%	1.23%	0.40%
Tyler Technologies	13.51%	12.21%	7.30%

Insider and Institutional Ownership

46.5% of Zscaler shares are owned by institutional investors. Comparatively, 93.3% of Tyler Technologies shares are owned by institutional investors. 17.2% of Zscaler shares are owned by company insiders. Comparatively, 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 is poised for long-term growth.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Zscaler	1	8	36	0	2.78
Tyler Technologies	0	4	11	1	2.81

Zscaler currently has a consensus price target of $236.65, indicating a potential upside of 22.48%. Tyler Technologies has a consensus price target of $440.88, indicating a potential upside of 4.14%. Given Zscaler’s higher probable upside, analysts clearly believe Zscaler is more favorable than Tyler Technologies.

Risk and Volatility

Zscaler has a beta of 0.82, indicating that its stock price is 18% less volatile than the S&P 500. Comparatively, Tyler Technologies has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500.

Summary

Tyler Technologies beats Zscaler on 9 of the 15 factors compared between the two stocks.

About Zscaler

Zscaler, Inc. is a cloud security company that provides services designed to help organizations protect users, applications, and data. Its platform, the Zscaler Zero Trust Exchange, connects users and devices to applications while applying security controls, rather than relying on traditional network boundaries. The company’s offerings include Zscaler Internet Access for securing internet and software-as-a-service traffic, and Zscaler Private Access for providing secure access to private applications.

About Tyler Technologies

Tyler Technologies provides software and technology services primarily to public-sector organizations. Its customers include state and local governments, courts, public safety agencies, schools, and other public entities. The company’s offerings include software for financial management, tax and property appraisal, courts and justice, public safety, education, utility billing, and permitting. Tyler also provides digital services such as online payments and tools for public access to government information.