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MSI

Motorola Solutions NYSE:MSI Stock Report

Last Price

US$235.42

Market Cap

US$39.3b

7D

4.3%

1Y

1.4%

Updated

04 Oct, 2022

Data

Company Financials +
MSI fundamental analysis
Snowflake Score
Valuation2/6
Future Growth2/6
Past Performance2/6
Financial Health2/6
Dividends4/6

MSI Stock Overview

Motorola Solutions, Inc. provides mission critical communications and analytics in the United States, the United Kingdom, Canada, and internationally.

Motorola Solutions Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Motorola Solutions
Historical stock prices
Current Share PriceUS$235.42
52 Week HighUS$273.65
52 Week LowUS$195.18
Beta0.91
1 Month Change-3.43%
3 Month Change8.53%
1 Year Change1.36%
3 Year Change37.87%
5 Year Change164.28%
Change since IPO561.62%

Recent News & Updates

Oct 03
Here's Why Motorola Solutions (NYSE:MSI) Has Caught The Eye Of Investors

Here's Why Motorola Solutions (NYSE:MSI) Has Caught The Eye Of Investors

The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even...

Sep 28

Motorola Solutions: Record Backlog Is 6x Q2 Revenue

Summary MSI's Q2 was a strong beat - led by growth in the Video Security and its Command Center Software businesses. That, along with a solid performance by the Land Mobile Radio business, led the company to increase its FY22 revenue and EPS guidance. Despite a continued FX headwind, MSI grew its backlog for the eighth straight quarter - ending Q2 with a record $13.8 billion, which is more than 6x Q2 total revenue. MSI's resilient businesses in the face of recession have enabled the stock to hang tough over the past year (down only ~2%), outperforming the S&P500 by ~18%. The stock yields 1.4%, trades with a forward P/E of 22.7x, and should earn $10+/share this year. As I have been reporting in my Seeking Alpha articles on Motorola Solutions (MSI), the company has been growing via strategic acquisitions in the video surveillance market - a complementary business that dovetails nicely with MSI's first-responder, critical-communications, and public safety radio & networks solutions. Video security and access control sales were up 21% yoy. That was one reason MSI's Q2 earnings report was a beat on both the top- and bottom-lines (there were other reasons as well). The strong Q2 and recent order flow led management to raise full-year 2022 revenue and earnings guidance. Meantime, MSI was able to grow the backlog to a record $13.4 billion - up 19% yoy - and more than 6x Q2's total revenue. This is why I would argue that Motorola is a great company to hold during a recession: regardless of the macro-economic background, for at least the next year-and-a-half or so, MSI is likely going to continue to perform very well and generate strong free-cash-flow. If you already hold MSI shares with a full-position, I rate it a HOLD here ($229). If you are looking to take a position in the company, I advise you BUY and to dollar-cost-average over time in order to take advantage of current market dynamics to pick-up shares on weakness. Q2 Earnings In early August, MSI released its Q2 Earnings Report, which was a strong beat on both the top- and bottom-lines. Non-GAAP EPS of $2.07 came in $0.20/share above estimates while revenue of $2.1 billion (+6.6 yoy) was a $40 million beat. Q2 highlights are shown below: MSI As mentioned in the bullets, the quarter was driven by excellent growth in Video Security and Command Center Software ("CCS"), both of which grew 21% yoy. Also, note the solid growth in MSI's Land Mobile Radio ("LMR") business, where sales were +5% yoy. MSI CEO Greg Brown informed investors on the Q2 conference call what is driving MSI's core LMR business: LMR is benefiting from the Tier P25 APX NEXT device (see graphic below) with customers embracing its unique ability to offer the must-have reliability of LMR while seamlessly leveraging broadband features such as remote programming, network extension and location services. MSI Notably, MSI has been able to take advantage of pent-up demand for its traditional civil-agency radios & networks, combined with new vertical markets like video & CCS, to grow its backlog for 8-straight quarters and ended Q2 with a record backlog of $13.4 billion, up a whopping 19% from a year ago and more than 6x Q2's total revenue. However, GAAP operating margin was 16.7% of sales, down from 18.8% in Q2 of last year primarily due to higher costs for semiconductors and higher operating costs for acquisitions. Going Forward: Raised Guidance, Strong Order Ramp-up As a result of the strong Q2 and continuing strength in orders and backlog, MSI raised FY2022 guidance and now expects revenue growth of ~8%, up from prior guidance of 7%. Non-GAAP EPS is now expected to be between $10.03-$10.13/share. The mid-point of the latest guidance ($10.08/share) is up from the mid-point of prior guidance ($9.88/share) by $0.20/share, or ~2%. The updated guidance included expectations of foreign currency headwinds of ~$170 million. MSI's CCS business continues to grow at a brisk pace. On the Q2 conference call, MSI CFO Jason Winkler reported: We also had 3 large Command Center Software in the U.S. -- orders in the U.S., $35 million from a large metropolitan city, $14 million from the Los Angeles Police Department and $11 million from Frederick County, Maryland. We were also awarded an $8 million body-worn camera order from the Detroit Police Department. In aggregate, that is $60 million in new CCS orders during the quarter and indicates that that relatively high-margin software business continues to ramp-up. Significant growth at MSI's Video Security & CCS business should enable MSI to expand its operating margin. On the Q2 conference call referenced earlier, CEO Brown also reported that MSI's Professional & Commercial Radio ("PCR") business continues ramping-up: We had record Q2 product orders at higher prices, including our single largest quarter ever for PCR orders, and we ended the quarter with record Q2 ending backlog. The pricing actions we've taken to offset higher input costs position us well for margin expansion for the back half of this year. During Q2, PCR sales were +15% yoy, and the company said it expects sales to grow 10% in FY2023. Valuation If the company hits the mid-range of EPS guidance ($10.08/share), at the current stock price of $229, that equates to a forward P/E of 22.7x. Maybe not a reason to buy (yet), but certainly a reason not to sell - especially given the very strong backlog. In my last article on MSI in July, shares were at $215/share and I recommended investors BUY the stock (see MSI: Record Backlog, Huge Video TAM Opportunity). The stock is up 6.3% since that article, out-performing the broad S&P500 by ~10%. I would still be a buyer if the market were to give you an opportunity at $215. Risks As I mentioned earlier, the nature of MSI's businesses, combined with the record backlog, implies that MSI will be very resilient over at least the next year-and-a-half in spite of numerous macro-economic headwinds. However, note that free-cash-flow was actually negative in Q2 (-$49 million) compared to $326 million of FCF generated in the prior year. MSI is typically a fairly stable and excellent generator of FCF, but the "miss" this time was due to "planned investments in inventory to navigate the dynamic supply-chain environment and position us to fulfill the record demand we're seeing in Video and LMR." In other words, the company was using free-cash-flow to position itself up for future out-performance.

Sep 19
Many Would Be Envious Of Motorola Solutions' (NYSE:MSI) Excellent Returns On Capital

Many Would Be Envious Of Motorola Solutions' (NYSE:MSI) Excellent Returns On Capital

If you're looking for a multi-bagger, there's a few things to keep an eye out for. Firstly, we'd want to identify a...

Shareholder Returns

MSIUS CommunicationsUS Market
7D4.3%5.0%4.4%
1Y1.4%-16.0%-18.2%

Return vs Industry: MSI exceeded the US Communications industry which returned -17.1% over the past year.

Return vs Market: MSI exceeded the US Market which returned -20% over the past year.

Price Volatility

Is MSI's price volatile compared to industry and market?
MSI volatility
MSI Average Weekly Movement3.5%
Communications Industry Average Movement7.3%
Market Average Movement6.9%
10% most volatile stocks in US Market15.5%
10% least volatile stocks in US Market2.8%

Stable Share Price: MSI is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: MSI's weekly volatility (3%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
192818,700Greg Brownhttps://www.motorolasolutions.com

Motorola Solutions, Inc. provides mission critical communications and analytics in the United States, the United Kingdom, Canada, and internationally. The company operates in two segments, Products and Systems Integration, and Software and Services. The Products and Systems Integration segment offers a portfolio of infrastructure, devices, accessories, and video security devices and infrastructure, as well as the implementation, and integration of systems, devices, software, and applications for government, public safety, and commercial customers who operate private communications networks and video security solutions, as well as manage a mobile workforce.

Motorola Solutions Fundamentals Summary

How do Motorola Solutions's earnings and revenue compare to its market cap?
MSI fundamental statistics
Market CapUS$39.29b
Earnings (TTM)US$1.20b
Revenue (TTM)US$8.46b

32.7x

P/E Ratio

4.6x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
MSI income statement (TTM)
RevenueUS$8.46b
Cost of RevenueUS$4.38b
Gross ProfitUS$4.08b
Other ExpensesUS$2.88b
EarningsUS$1.20b

Last Reported Earnings

Jul 02, 2022

Next Earnings Date

n/a

Earnings per share (EPS)7.21
Gross Margin48.26%
Net Profit Margin14.22%
Debt/Equity Ratio-1,397.9%

How did MSI perform over the long term?

See historical performance and comparison

Dividends

1.3%

Current Dividend Yield

43%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is MSI undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for MSI?

Other financial metrics that can be useful for relative valuation.

MSI key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue5.3x
Enterprise Value/EBITDA20.1x
PEG Ratio2.8x

Price to Earnings Ratio vs Peers

How does MSI's PE Ratio compare to its peers?

MSI PE Ratio vs Peers
The above table shows the PE ratio for MSI vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average30.5x
ANET Arista Networks
35.5x10.5%US$36.8b
UI Ubiquiti
49.3x20.1%US$18.7b
JNPR Juniper Networks
22.8x10.7%US$8.9b
CSCO Cisco Systems
14.5x5.0%US$171.8b
MSI Motorola Solutions
32.7x11.7%US$39.3b

Price-To-Earnings vs Peers: MSI is expensive based on its Price-To-Earnings Ratio (32.7x) compared to the peer average (30.5x).


Price to Earnings Ratio vs Industry

How does MSI's PE Ratio compare vs other companies in the US Communications Industry?

Price-To-Earnings vs Industry: MSI is expensive based on its Price-To-Earnings Ratio (32.7x) compared to the US Communications industry average (23.4x)


Price to Earnings Ratio vs Fair Ratio

What is MSI's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

MSI PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio32.7x
Fair PE Ratio23.4x

Price-To-Earnings vs Fair Ratio: MSI is expensive based on its Price-To-Earnings Ratio (32.7x) compared to the estimated Fair Price-To-Earnings Ratio (23.4x).


Share Price vs Fair Value

What is the Fair Price of MSI when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: MSI ($235.42) is trading below our estimate of fair value ($323.8)

Significantly Below Fair Value: MSI is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.


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Future Growth

How is Motorola Solutions forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


11.7%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MSI's forecast earnings growth (11.7% per year) is above the savings rate (1.9%).

Earnings vs Market: MSI's earnings (11.7% per year) are forecast to grow slower than the US market (14.7% per year).

High Growth Earnings: MSI's earnings are forecast to grow, but not significantly.

Revenue vs Market: MSI's revenue (6% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: MSI's revenue (6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: MSI's Return on Equity is forecast to be very high in 3 years time (159.7%).


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Past Performance

How has Motorola Solutions performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


27.3%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: MSI has high quality earnings.

Growing Profit Margin: MSI's current net profit margins (14.2%) are lower than last year (14.6%).


Past Earnings Growth Analysis

Earnings Trend: MSI's earnings have grown significantly by 27.3% per year over the past 5 years.

Accelerating Growth: MSI's earnings growth over the past year (4.4%) is below its 5-year average (27.3% per year).

Earnings vs Industry: MSI earnings growth over the past year (4.4%) underperformed the Communications industry 11.6%.


Return on Equity

High ROE: MSI's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.


Discover strong past performing companies

Financial Health

How is Motorola Solutions's financial position?

Financial Health Score

2/6

Financial Health Score 2/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: MSI has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: MSI has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.


Debt to Equity History and Analysis

Debt Level: MSI has negative shareholder equity, which is a more serious situation than a high debt level.

Reducing Debt: MSI's has negative shareholder equity, so we do not need to check if its debt has reduced over time.

Debt Coverage: MSI's debt is well covered by operating cash flow (20.6%).

Interest Coverage: MSI's interest payments on its debt are well covered by EBIT (8.1x coverage).


Balance Sheet


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Dividend

What is Motorola Solutions's current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


1.34%

Current Dividend Yield

Dividend Yield vs Market

Motorola Solutions Dividend Yield vs Market
How does Motorola Solutions dividend yield compare to the market?
SegmentDividend Yield
Company (Motorola Solutions)1.3%
Market Bottom 25% (US)1.6%
Market Top 25% (US)4.5%
Industry Average (Communications)3.6%
Analyst forecast in 3 Years (Motorola Solutions)1.5%

Notable Dividend: MSI's dividend (1.34%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.64%).

High Dividend: MSI's dividend (1.34%) is low compared to the top 25% of dividend payers in the US market (4.63%).


Stability and Growth of Payments

Stable Dividend: MSI's dividends per share have been stable in the past 10 years.

Growing Dividend: MSI's dividend payments have increased over the past 10 years.


Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (43.1%), MSI's dividend payments are well covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (52.8%), MSI's dividend payments are covered by cash flows.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

3.9yrs

Average management tenure


CEO

Greg Brown (62 yo)

15.25yrs

Tenure

US$19,980,639

Compensation

Mr. Gregory Q. Brown, also known as Greg, has been the Chief Executive Officer of Motorola Solutions, Inc. since May 3, 2011. Mr. Brown has been an Executive Director of Motorola Solutions, Inc., since Jul...


CEO Compensation Analysis

Greg Brown's Compensation vs Motorola Solutions Earnings
How has Greg Brown's remuneration changed compared to Motorola Solutions's earnings?
DateTotal Comp.SalaryCompany Earnings
Jul 02 2022n/an/a

US$1b

Apr 02 2022n/an/a

US$1b

Dec 31 2021US$20mUS$1m

US$1b

Oct 02 2021n/an/a

US$1b

Jul 03 2021n/an/a

US$1b

Apr 03 2021n/an/a

US$996m

Dec 31 2020US$23mUS$938k

US$949m

Sep 26 2020n/an/a

US$780m

Jun 27 2020n/an/a

US$842m

Mar 28 2020n/an/a

US$914m

Dec 31 2019US$24mUS$1m

US$868m

Sep 28 2019n/an/a

US$1b

Jun 29 2019n/an/a

US$1b

Mar 30 2019n/an/a

US$1b

Dec 31 2018US$20mUS$1m

US$966m

Sep 29 2018n/an/a

-US$31m

Jun 30 2018n/an/a

-US$66m

Mar 31 2018n/an/a

-US$115m

Dec 31 2017US$15mUS$1m

-US$155m

Sep 30 2017n/an/a

US$663m

Jul 01 2017n/an/a

US$644m

Apr 01 2017n/an/a

US$620m

Dec 31 2016US$12mUS$1m

US$560m

Oct 01 2016n/an/a

US$594m

Jul 02 2016n/an/a

US$526m

Apr 02 2016n/an/a

US$570m

Dec 31 2015US$13mUS$1m

US$640m

Compensation vs Market: Greg's total compensation ($USD19.98M) is above average for companies of similar size in the US market ($USD13.04M).

Compensation vs Earnings: Greg's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: MSI's management team is considered experienced (3.9 years average tenure).


Board Members

Experienced Board: MSI's board of directors are considered experienced (7.2 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: MSI insiders have only sold shares in the past 3 months.


Recent Insider Transactions

NYSE:MSI Recent Insider Transactions by Companies or Individuals
DateValueNameEntityRoleSharesMax Price
12 Sep 22SellUS$645,279Cynthia YazdiIndividual2,546US$253.45
12 Aug 22SellUS$127,145Cynthia YazdiIndividual500US$254.29
10 Aug 22SellUS$224,849Cynthia YazdiIndividual886US$253.78
08 Aug 22SellUS$1,967,523Mark HackerIndividual7,900.11US$249.05
07 Jun 22SellUS$5,493,789Gregory BrownIndividual25,000US$220.99

Ownership Breakdown

What is the ownership structure of MSI?
Owner TypeNumber of SharesOwnership Percentage
Private Companies1,6540.001%
State or Government72,8840.04%
Individual Insiders605,4830.4%
General Public21,734,98113.0%
Institutions144,470,12586.6%

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Top 25 shareholders own 56.19% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
11.9%
The Vanguard Group, Inc.
19,865,556$4.7b0.19%0.11%
8.42%
BlackRock, Inc.
14,052,510$3.3b-2.11%0.08%
7.08%
Capital Research and Management Company
11,822,082$2.8b2.05%0.19%
4.28%
State Street Global Advisors, Inc.
7,135,890$1.7b-2.8%0.09%
2.16%
Macquarie Investment Management Business Trust
3,599,460$847.4m-1.64%0.91%
1.97%
Geode Capital Management, LLC
3,281,536$772.5m0.55%0.1%
1.92%
AllianceBernstein L.P.
3,197,638$752.8m45.99%0.3%
1.6%
Wellington Management Group LLP
2,669,980$628.6m-2.73%0.11%
1.48%
Neuberger Berman Investment Advisers LLC
2,462,789$579.8m-0.63%0.56%
1.26%
T. Rowe Price Group, Inc.
2,096,526$493.6m-35.2%0.06%
1.22%
Amundi Asset Management
2,040,227$480.3m-11.37%0.14%
1.19%
J.P. Morgan Asset Management, Inc.
1,979,072$465.9m12.05%0.08%
1.14%
Raymond James Financial Inc., Asset Management Arm
1,896,834$446.6m10.51%0.44%
1.14%
Northern Trust Global Investments
1,896,281$446.4m-2.64%0.09%
1.13%
Deutsche Asset & Wealth Management
1,890,165$445.0m-4.09%0.19%
1.1%
Invesco Ltd.
1,840,361$433.3m8.57%0.14%
0.94%
Norges Bank Investment Management
1,572,904$370.3m0%0.05%
0.87%
EdgePoint Investment Group Inc.
1,447,901$340.9m96.63%1.95%
0.87%
Legal & General Investment Management Limited
1,447,848$340.9m1.35%0.1%
0.87%
BNY Mellon Asset Management
1,443,965$339.9m-1.56%0.08%
0.78%
Managed Account Advisors LLC
1,293,891$304.6m4.91%0.08%
0.77%
Victory Capital Management Inc.
1,281,853$301.8m3.84%0.33%
0.73%
California Public Employees' Retirement System
1,223,663$288.1m-2.54%0.26%
0.71%
UBS Asset Management
1,184,435$278.8m-4.2%0.05%
0.69%
Orbis Investment Management Limited
1,156,908$272.4m24.63%1.16%

Company Information

Motorola Solutions, Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: Motorola Solutions, Inc.
  • Ticker: MSI
  • Exchange: NYSE
  • Founded: 1928
  • Industry: Communications Equipment
  • Sector: Tech
  • Implied Market Cap: US$39.288b
  • Shares outstanding: 166.89m
  • Website: https://www.motorolasolutions.com

Number of Employees


Location

  • Motorola Solutions, Inc.
  • 500 West Monroe Street
  • Suite 4400
  • Chicago
  • Illinois
  • 60661
  • United States


Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MSINYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
0K3HLSE (London Stock Exchange)YesCommon StockGBUSDJan 1968
MTLAXTRA (XETRA Trading Platform)YesCommon StockDEEURJan 1968
MSI *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1968
MTLADB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
MOT-UETLX (Eurotlx)YesCommon StockITEURJan 1968
MOSIWBAG (Wiener Boerse AG)YesCommon StockATEURJan 1968
MSIBASE (Buenos Aires Stock Exchange)CEDEAR EACH REP 1/5 ORD (USD)ARARSSep 2000
M1SI34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 4 REPR 1 COMBRBRLJan 2020

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/10/04 00:00
End of Day Share Price2022/10/04 00:00
Earnings2022/07/02
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.