Analyst Note| Brian Colello, CPA |
Narrow-moat Motorola Solutions reported strong first-quarter results that exceeded the firm’s guidance on revenue and EPS, while also providing positive second-quarter outlook as well as improved full-year guidance. The company experienced a record first-quarter backlog and number of orders, as well as double-digit revenue growth in video security, command center software, and land mobile radio, or LMR, services. Video security in particular is experiencing strong market share gains, per management, and should achieve over 20% growth for the full year. Motorola may also be a beneficiary of the American Rescue Plan with potentially higher spending in public safety and education. We are raising our fair value estimate to $189 from $174 and view shares as fairly valued.