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Motorola Solutions (MSI)
NYSE:MSI
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Motorola Solutions
(NYSE:MSI)73Outperform
Positive Factors
Acquisition
Motorola announced that it acquired RapidDeploy, a cloud-native 911 software provider specializing in location mapping and emergency data.
Market Demand
Record demand for public safety communications, video security, and command center software should drive long-term EPS growth in the low double digits.
Negative Factors
Product Backlog
Motorola shares traded down 10%-plus following earnings, with the decline in product backlog a contributing factor.
Motorola Solutions (MSI) vs. S&P 500 (SPY)
Market Cap
$73.49B
Dividend Yield0.94%
Average Volume (3M)875.78K
Price to Earnings (P/E)47.7
Beta (1Y)0.89
Revenue Growth8.41%
EPS Growth-7.83%
CountryUS
Employees21,000
SectorTechnology
Sector Strength48
IndustryHardware & Equipment
Share Statistics
EPS (TTM)9.22
Shares Outstanding166,936,950
10 Day Avg. Volume1,087,033
30 Day Avg. Volume875,780
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)6.79
Price to Cash Flow (P/CF)17.20
P/FCF Ratio16.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$537.00Price Target Upside26.93% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
Motorola Solutions Business Overview & Revenue Model
Company DescriptionMotorola Solutions, Inc. (MSI) is a leading global provider of mission-critical communication solutions and services for enterprise and government customers. The company operates primarily in two segments: Products and Systems Integration, and Software and Services. Its core products include two-way radio systems, public safety communications, and video security and analytics solutions. Motorola Solutions' offerings are designed to enhance the safety, efficiency, and effectiveness of its clients' operations, with a strong focus on innovation and reliability.
How the Company Makes MoneyMotorola Solutions generates revenue through multiple streams, with the primary being the sale of its communications products and systems integration services. The company earns substantial income from its two-way radio systems and public safety communications equipment, catering to both government and enterprise customers. Additionally, Motorola Solutions has a growing Software and Services segment that provides recurring revenue through software as a service (SaaS), managed services, and support and maintenance contracts. Significant partnerships with government bodies and large enterprises, as well as acquisitions in the video security and analytics space, further bolster the company's earnings.
Motorola Solutions Financial Statement Overview
Summary
Motorola Solutions demonstrates robust financial health with strong revenue growth and cash flow generation. While profitability margins are strong, there is a slight dip in net profit margin. The balance sheet reflects high leverage, though improving, with a strong return on equity.Income Statement
Motorola Solutions exhibits strong revenue growth with a Revenue Growth Rate of 8.41% from 2023 to TTM (Trailing-Twelve-Months). The Gross Profit Margin remains robust at approximately 50.27% in TTM. However, the Net Profit Margin has slightly decreased to 14.57% in TTM, indicating some pressure on profitability. EBIT and EBITDA margins remain healthy, reflecting operational efficiency.85
Very Positive
Balance Sheet
The company's Debt-to-Equity Ratio has improved to 3.58 in TTM, indicating better leverage management, though still high. The Return on Equity (ROE) is strong at 92.63% in TTM, driven by high net income relative to equity. The Equity Ratio is relatively low at 11.67%, suggesting reliance on debt financing.70
Positive
Cash Flow
Motorola Solutions shows a solid Free Cash Flow Growth Rate of 19.06% from 2023 to TTM, indicating strong cash generation capabilities. The Operating Cash Flow to Net Income Ratio is 1.52, highlighting effective conversion of earnings into cash. The Free Cash Flow to Net Income Ratio of 1.35 further supports the company's strong cash flow position.90
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 10.82B | 9.98B | 9.11B | 8.17B | 7.41B | Gross Profit |
| 5.51B | 4.97B | 4.23B | 4.04B | 3.61B | EBIT |
| 2.69B | 2.29B | 1.66B | 1.67B | 1.38B | EBITDA |
| 2.60B | 2.75B | 2.26B | 2.26B | 1.86B | Net Income Common Stockholders |
| 1.58B | 1.71B | 1.36B | 1.25B | 949.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 2.10B | 1.71B | 1.32B | 1.87B | 1.25B | Total Assets |
| 14.60B | 13.34B | 12.81B | 12.19B | 10.88B | Total Debt |
| 6.10B | 6.55B | 6.55B | 6.01B | 5.58B | Net Debt |
| 4.00B | 4.84B | 5.23B | 4.13B | 4.32B | Total Liabilities |
| 12.88B | 12.60B | 12.68B | 12.21B | 11.42B | Stockholders Equity |
| 1.70B | 724.00M | 116.00M | -40.00M | -558.00M |
| Cash Flow | Free Cash Flow | |||
| 2.13B | 1.79B | 1.57B | 1.59B | 1.40B | Operating Cash Flow |
| 2.39B | 2.04B | 1.82B | 1.84B | 1.61B | Investing Cash Flow |
| -507.00M | -414.00M | -1.39B | -742.00M | -437.00M | Financing Cash Flow |
| -1.45B | -1.29B | -906.00M | -429.00M | -966.00M |
Motorola Solutions Technical Analysis
Negative
423.06
Price Trends
458.45
Negative
467.86
Negative
435.55
Negative
Market Momentum
-11.26
Positive
36.31
Neutral
49.56
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MSI, the sentiment is Negative. The current price of 423.06 is below the 20-day moving average (MA) of 447.82, below the 50-day MA of 458.45, and below the 200-day MA of 435.55, indicating a bearish trend. The MACD of -11.26 indicates Positive momentum. The RSI at 36.31 is Neutral, neither overbought nor oversold. The STOCH value of 49.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MSI.
Motorola Solutions Risk Analysis
Motorola Solutions disclosed 28 risk factors in its most recent earnings report. Motorola Solutions reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Motorola Solutions Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $13.43B | 15.81 | 71.93% | 2.02% | 14.07% | 116.33% | |
75 Outperform | $68.68B | 18.64 | 17.14% | 2.23% | 12.88% | 13.78% | |
75 Outperform | $53.41B | 30.89 | 11.01% | 1.79% | -4.53% | -14.72% | |
73 Outperform | $73.49B | 47.68 | 92.60% | 0.94% | 8.41% | -7.83% | |
71 Outperform | $39.11B | 26.37 | 7.70% | 2.23% | 9.82% | 22.33% | |
68 Neutral | $135.18B | 23.89 | 596.13% | 2.08% | 5.05% | 2.73% | |
59 Neutral | $22.39B | 11.53 | -18.05% | 2.31% | 5.00% | -25.89% |
* Technology Sector Average
Performance Comparison
MSI
Motorola Solutions
423.06
94.56
28.79%
BAH
Booz Allen
105.79
-41.20
-28.03%
GD
General Dynamics
250.80
-17.38
-6.48%
LHX
L3Harris Technologies
207.08
-2.47
-1.18%
HON
Honeywell International
208.00
14.75
7.63%
JCI
Johnson Controls
80.90
21.79
36.86%
Motorola Solutions Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: -9.22% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong overall performance in 2024 with record-breaking revenue, growth, and cash flow. The company has a positive outlook for 2025, driven by strong demand and a robust backlog. However, challenges include international revenue declines, higher operating expenses, and currency headwinds. The sentiment is positive, given the significant achievements outweighing the challenges.Highlights
Record Revenue and Growth
Achieved record revenue in both segments and all three technologies, with double-digit growth in video and command center.
Strong Full-Year Performance
Full-year revenue was $10.8 billion, up 8%. Expanded operating margins by 380 basis points and grew EPS by 16%.
Record Backlog
Ended the year with a record backlog of $14.7 billion, up $438 million despite unfavorable currency rates.
Successful Acquisitions
Completed four acquisitions in video and command center technologies, strengthening safety and security offerings.
Strong Cash Flow Growth
Record operating cash flow of $2.4 billion, up 17% year-over-year, marking the second consecutive year of double-digit growth.
Positive Outlook for 2025
Expecting 5.5% revenue growth and strong demand in video and command center technologies for 2025.
Lowlights
Decline in International Revenue
Full-year international revenue was down 2%, primarily driven by lower Ukraine revenue and exit from ESN.
Higher Operating Expenses
Full-year OpEx was $2.4 billion, up $197 million due to higher employee incentives and legal costs.
Impact of Unfavorable Currency Rates
Reported $226 million in foreign currency headwinds affecting backlog and $120 million expected FX headwinds for 2025.
Potential Tariff Challenges
Navigating potential tariff impacts with a flexible manufacturing footprint, though current tariffs are manageable.
Company Guidance
During the fourth quarter earnings call for fiscal year 2024, Motorola Solutions reported significant achievements, including record revenue across both segments and all three technologies, with double-digit growth in video and command center technologies. The company ended the year with a record backlog of $14.7 billion, despite $226 million in unfavorable currency rates. Full-year revenue increased by 8% to $10.8 billion, driven by strong growth in both product and software & services segments. Product and SI revenue grew by 10%, while software and services revenue rose by 5% or 13% excluding the UK Home Office. Non-GAAP operating earnings for the year were $3.1 billion, with a 29% margin, and non-GAAP earnings per share increased by 16% to $13.84. For 2025, the company anticipates a 5.5% revenue growth, an increase in non-GAAP EPS to between $14.64 and $14.74, and a third consecutive year of double-digit operating cash flow growth, projected at $2.7 billion.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.