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Motorola Solutions Inc MSI

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Stock XNYS Rating as of
$325.32 +2.45 (0.76%)
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Company Report

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Motorola Earnings: Another Terrific Period of Robust Demand Brings Valuation up to $230 From $223

William Kerwin

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.

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Price vs Fair Value

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MSI is trading at a 41% premium.
Price
$325.31
Fair Value
$412.00
Uncertainty
Medium
1-Star Price
$974.30
5-Star Price
$373.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

We think Motorola’s video and software businesses becoming a larger portion of overall revenue will expand firmwide gross and operating margins.

Bears

We think the merged L3Harris could create a more robust competitor to Motorola’s land mobile radio business and potentially eat into the latter's market share and top-line growth potential.

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News

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Trading Information

Previous Close Price
$322.87
Day Range
$322.56–325.90
52-Week Range
$251.25–325.90
Bid/Ask
$325.31 / $326.62
Market Cap
$53.99 Bil
Volume/Avg
708,354 / 650,072

Key Statistics

Price/Earnings (Normalized)
27.92
Price/Sales
5.69
Dividend Yield
1.08%
Dividend Yield (Forward)
1.21%
Total Yield
2.31%

Company Profile

Motorola Solutions is a leading provider of communications and analytics, primarily serving public safety departments as well as schools, hospitals, and businesses. The bulk of the firm’s revenue comes from sales of land mobile radios and radio network infrastructure, but the firm also sells surveillance equipment and dispatch software. Most of Motorola’s revenue comes from government agencies, while roughly 25% comes from schools and private businesses. Motorola has customers in over 100 countries and in every state in the United States.
Sector
Technology
Industry
Communication Equipment
Stock Style Box
Large Core
Total Number of Employees
20,000
Website
https://www.motorolasolutions.com

Competitors

Valuation

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Metric
MSI
NOK
ERIC
Price/Earnings (Normalized)
 27.929.6211.96
Price/Book Value
 149.360.861.71
Price/Sales
 5.690.760.64
Price/Cash Flow
 22.266.1510.74
Price/Earnings
MSI
NOK
ERIC

Financial Strength

Metric
MSI
NOK
ERIC
Quick Ratio
 0.721.350.79
Current Ratio
 0.951.641.10
Interest Coverage
 9.9624.02−5.57
Quick Ratio
MSI
NOK
ERIC

Profitability

Metric
MSI
NOK
ERIC
Return on Assets (Normalized)
 16.32%4.74%−6.75%
Return on Equity (Normalized)
 1,565.52%9.47%−17.96%
Return on Invested Capital (Normalized)
 32.91%7.75%−12.80%
Return on Assets
MSI
NOK
ERIC

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