A Look at Motorola Solutions’s Valuation After Record Q2 Results and Upgraded Outlook

If you are trying to figure out what to do with Motorola Solutions (NYSE:MSI) after a big move, you are not alone. The company just posted record-breaking revenue, earnings, and orders for the second quarter, thanks in large part to momentum in its software and services business. In addition, management raised the outlook for the full year, giving investors a clear reason to pay closer attention to expectations.

This latest update comes as Motorola Solutions continues its steady climb over the past year. The stock is up about 9% in the past 12 months and has added an impressive 19% over the past 3 months alone, reflecting confidence after the robust Q2 update. The completion of its $4.4 billion acquisition of Silvus is worth mentioning, though it is not expected to affect earnings per share in 2025, so the headline growth story is still centered on the core business performing strongly.

With the shares moving higher and optimism building, the real question is whether Motorola Solutions is still undervalued or if the market has already factored in all the company’s future growth.

Most Popular Narrative: 4.4% Undervalued

According to the most widely followed narrative, Motorola Solutions is currently viewed as slightly undervalued, with its fair value estimated to be just over 4% above the current share price. Analysts reach this conclusion by modeling robust future earnings and profit margin expansion, but recognize that the stock already trades close to their target.

The accelerating focus on public safety and security, fueled by heightened geopolitical instability, border security needs, and new government funding programs like the "One Big Beautiful Bill," is driving strong, sustained customer demand for advanced, integrated communication solutions. This expanding long-term tailwind is visible in Motorola's record Q2 orders, growing backlog, and consistent multi-year contract wins, supporting above-trend revenue growth and durability.

Want to know what’s driving the buzz about Motorola Solutions’ future? Analysts think the company’s ongoing transformation and bold assumptions about profit growth could mean much bigger things ahead. Uncover the optimism around their projections and see what key numbers they’re betting on for Motorola’s valuation leap.

Result: Fair Value of $503.75 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, the picture is not without risks, as heavy reliance on government budgets and rapidly evolving technology trends could challenge Motorola Solutions' future growth trajectory.

Find out about the key risks to this Motorola Solutions narrative.

Another View: A Different Lens on Value

While analysts see Motorola Solutions as undervalued based on their future growth projections, our DCF model points to a less optimistic picture. This suggests the shares might actually be trading above fair value. Which view makes more sense?

Look into how the SWS DCF model arrives at its fair value.

Stay updated when valuation signals shift by adding Motorola Solutions to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own Motorola Solutions Narrative

If you would like to dig deeper or shape your own perspective from the numbers, you can quickly build your own narrative in just a few minutes. Do it your way

A great starting point for your Motorola Solutions research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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