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Motorola Solutions Inc MSI

Morningstar Rating
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Stock XNYS Rating as of
$359.74 −3.01 (0.83%)
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As of Cboe BZX Real-Time Price Open
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Company Report

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Motorola Earnings: LMR Business Surprises on Growth and Margin Expansion; Valuation Increased

Eric Compton

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.

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Price vs Fair Value

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MSI is trading at a 57% premium.
Price
$362.85
Fair Value
$222.00
Uncertainty
Medium
1-Star Price
$748.00
5-Star Price
$765.00
Economic Moat
Sct
Capital Allocation
Rjqdtcxqhq

Bulls Say, Bears Say

Bulls

Motorola’s higher-growth, higher-margin, software-related businesses are becoming a larger portion of overall revenue. This will expand firmwide margins and opens a long runway of potential double-digit-percentage growth in each relevant segment.

Bears

If more governments use their power to unilaterally decrease Motorola’s pricing and/or threaten contracts, like what has happened in the UK, it would be a headwind to growth.

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News

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Trading Information

Previous Close Price
$362.75
Day Range
$359.55–364.53
52-Week Range
$269.70–364.53
Bid/Ask
$359.54 / $359.79
Market Cap
$60.00 Bil
Volume/Avg
194,535 / 673,274

Key Statistics

Price/Earnings (Normalized)
28.98
Price/Sales
6.07
Dividend Yield (Trailing)
1.03%
Dividend Yield (Forward)
1.09%
Total Yield
2.07%

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
21,000
Website
https://www.motorolasolutions.com

Competitors

Valuation

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Metric
MSI
TYL
NOK
Price/Earnings (Normalized)
 28.9858.3811.10
Price/Book Value
 116.176.750.90
Price/Sales
 6.0710.360.91
Price/Cash Flow
 24.0752.047.22
Price/Earnings
MSI
TYL
NOK

Financial Strength

Metric
MSI
TYL
NOK
Quick Ratio
 0.940.851.40
Current Ratio
 1.190.941.65
Interest Coverage
 7.2613.48—
Quick Ratio
MSI
TYL
NOK

Profitability

Metric
MSI
TYL
NOK
Return on Assets (Normalized)
 16.91%7.65%3.94%
Return on Equity (Normalized)
 494.72%12.39%7.69%
Return on Invested Capital (Normalized)
 33.00%10.10%5.98%
Return on Assets
MSI
TYL
NOK
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