Company Reports

We are increasing our fair value estimate for wide-moat-rated Motorola to $320 per share from $312 as the company reported excellent first-quarter earnings. Shares are slightly overvalued in our view. Given strong results and the updated outlook, we are slightly increasing our growth and margin expectations. We will keep an eye on margin development within land mobile radio as margin strength here surprised us, with management citing a shift toward feature-rich LMR products and improving scale and supply dynamics. We have slightly increased our longer-term gross margin estimate for this segment.

Motorola Solutions offers one of the most comprehensive solution sets for public safety, a sticky business where Motorola is a major player. We expect continued growth and margin expansion, with potential upside if the firm can complete additional accretive acquisitions.

Motorola Solutions offers one of the most comprehensive solution sets for public safety, a sticky business where Motorola is a major player. We expect continued growth and margin expansion, with potential upside if the firm can complete additional accretive acquisitions.

We are transferring coverage of Motorola Solutions and raising our fair value estimate to $312 per share from $237. This increase was primarily driven by our reevaluation of how long Motorola could keep increasing earnings at a mid- to upper-single-digit percentage pace. We are also upgrading our moat rating to wide from narrow. Our increased confidence in Motorola's moat and future growth runway, particularly in how tenable it is, is the primary driver of our fair value estimate change.

Motorola Solutions offers one of the most comprehensive solution sets for public safety, a sticky business where Motorola is a major player. We expect continued growth and margin expansion, with potential upside if the firm can complete additional accretive acquisitions.

We raise our fair value estimate for narrow-moat Motorola Solutions to $237 per share, from $230, to incorporate slightly higher 2024 guidance and account for the time value of money. Motorola beat its quarterly guidance again and provided an upbeat outlook for the first quarter and full year. Strong results continue to demonstrate durable demand for public safety across Motorola’s radio, video, and software portfolio. We see the firm as uniquely positioned to benefit from public safety with its comprehensive solution set, which also undergirds our moat rating. We continue to see shares as overvalued, however. Shares dipped roughly 3% afterhours following the release of results, which we see as a moderation in high expectations that have driven shares to levels above the firm’s fundamentals.

We think Motorola Solutions offers one of the most comprehensive solution sets for public safety, complementing its mature but sticky land mobile radio business with video products and software that we expect to boost growth and margins over the short and long term.

We think Motorola Solutions offers one of the most comprehensive solution sets for public safety, complementing its mature but sticky land mobile radio business with video products and software that we expect to boost growth and margins over the short and long term.

We raise our fair value estimate for shares of narrow-moat Motorola Solutions to $230, from $223, after another quarter where results and guidance beat our expectations. Simply put, Motorola is seeing tremendous demand for public safety technology and is uniquely positioned to capitalize on this demand with its comprehensive portfolio. We see Motorola as competitively strong, with mission-critical, sticky products that underpin its economic moat. Still, we continue to find valuation challenging and see shares as overvalued.

We maintain our fair value estimate for Motorola Solutions of $223 per share after an impressive second quarter that came in line with our revenue estimates and above our profitability expectations. Following results coming in ahead of management’s high end of guidance as well as record backlog in the quarter, the company raised its full-year guidance. Motorola continues to navigate foreign-exchange headwinds and macro uncertainty with ease, showcasing the mission-critical and sticky nature of its products that underpins its economic moat. Motorola is poised to perform well even against tough backdrops that hinder peers, and we expect the improving supply environment to drive continued upside.

We've raised our fair value estimate for Motorola Solutions to $223 per share from $216 after an impressive first quarter that came in ahead of our estimates. The company also raised its full-year guidance. Motorola continues to navigate a rocky macroeconomic spending environment with ease, showcasing the mission-critical and sticky nature of its products that underpins its economic moat. Sales and earnings beat the top ends of management guidance, and gross margin was particularly impressive. Motorola is positioned to perform well even against tough backdrops that hamper peers, and we wouldn’t be surprised if the newly raised full-year guidance turns out to be modestly conservative.

We think Motorola Solutions offers one of the most comprehensive solution sets for public safety, complementing its mature but sticky land mobile radio business with video products and software that we expect to boost growth and margins over the short and long term.

We raise our fair value estimate for Motorola Solutions to $216 per share, from $210, after the firm’s fourth-quarter results and guidance for 2023 both beat our expectations. We remain impressed with Motorola’s performance over the past two years in the face of numerous headwinds to both margins and the demand for its commercial business. Motorola is starting to reap the benefits of recent legislation committing more government funding toward public safety, and we see this as a long-term boon for the firm. Additionally, Motorola has increased its acquisition activity, and we see it savvily bolting on complementary businesses. Motorola’s wide and expanding solution set creates sticky customer relationships that create a sturdy narrow economic moat, in our view. Though we see the firm as healthy and strong, shares continue to look fundamentally out of reach to us.

We think Motorola Solutions offers one of the most comprehensive solution sets for public safety, complementing its mature but sticky land mobile radio business with video products and software that we expect to boost growth and margins over both the short and long term.

We think Motorola Solutions offers one of the most comprehensive solution sets for public safety, complementing its mature but sticky land mobile radio business with video products and software that we expect to boost growth and margins over both the short and long term.

We are raising our fair value estimate for Motorola Solutions to $210 from $195 after a meaningful beat against third-quarter guidance and another raise to its full-year outlook. We are impressed with the company’s ability to execute well in the face of supply constraints, inflationary costs, and the strengthening U.S. dollar thus far, and we expect continued strength as headwinds begin to ease. We view long-lasting demand for its comprehensive suite of public safety solutions as a prerogative for its narrow economic moat. Still, we view shares as overvalued and would recommend investors wait for a lower entry point.

We think Motorola Solutions offers one of the most comprehensive solution sets for public safety, complementing its mature but sticky land mobile radio business with video products and software that we expect to boost growth and margins over both the short and long term.

We maintain our $195 fair value estimate for Motorola Solutions after surpassing second-quarter guidance and raising its full-year guidance. Motorola is set up for accelerating growth and margin expansion in the second half of the year, which we had been largely expecting. We see enduring strong demand for its comprehensive solution set for public safety as a testament to its narrow economic moat. Still, shares look pricey to us. We think the market is pricing in overly rosy expectations for margin expansion from Motorola’s expanding software portfolio, which we expect to come slowly and steadily. We recommend investors wait for a pullback.

We’re maintaining our $195 per share fair value estimate for narrow-moat Motorola Solutions after its first-quarter results provided upside to our expectations with a reaffirmation of its prior full year guidance for 2022. We think shares have come down to earth this year, and now view them as fairly valued. We think demand is strong and Motorola is generally executing well in the face of supply constraints, inflationary costs, and foreign exchange headwinds that are pressuring the top line and margins. For the long term, we continue to think Motorola will enjoy demand for its comprehensive solution set for public safety that we view as mission critical, sticky, and driving its narrow economic moat.

We’re raising our fair value estimate for narrow-moat Motorola Solutions to $195 per share, from $185, behind better long-term expectations for video and software growth. We expect Motorola to persevere through profitability pressures in the first half of 2022 and rebound nicely thereafter. Despite low first-half margin guidance, we were excited to hear management’s expectations for 20% video growth in 2022, after two years of 30% growth and now coming off a base of more than $1 billion. Growth in Motorola’s video and software businesses is a key tenet of our long-term thesis for growth and margin expansion, and we expect continued strength for both in 2022. Still, we continue to view shares as overvalued.