MOTOROLA SOLUTIONS INC (MSI) Stock Fundamental Analysis
NYSE:MSI - New York Stock Exchange, Inc. - US6200763075 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to MSI. MSI was compared to 51 industry peers in the Communications Equipment industry. While MSI has a great profitability rating, there are some minor concerns on its financial health. MSI has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year MSI was profitable.
MSI had a positive operating cash flow in the past year.
MSI had positive earnings in each of the past 5 years.
Each year in the past 5 years MSI had a positive operating cash flow.
1.2 Ratios
The Return On Assets of MSI (11.25%) is better than 94.12% of its industry peers.
The Return On Equity of MSI (117.80%) is better than 98.04% of its industry peers.
MSI has a Return On Invested Capital of 24.81%. This is amongst the best in the industry. MSI outperforms 98.04% of its industry peers.
The Average Return On Invested Capital over the past 3 years for MSI is significantly above the industry average of 11.02%.
The last Return On Invested Capital (24.81%) for MSI is above the 3 year average (20.80%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.25% | ||
| ROE | 117.8% | ||
| ROIC | 24.81% |
ROA(3y)11.22%
ROA(5y)10.11%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)20.8%
ROIC(5y)19.59%
1.3 Margins
MSI has a better Profit Margin (14.66%) than 90.20% of its industry peers.
In the last couple of years the Profit Margin of MSI has grown nicely.
MSI's Operating Margin of 25.25% is amongst the best of the industry. MSI outperforms 96.08% of its industry peers.
MSI's Operating Margin has improved in the last couple of years.
MSI has a better Gross Margin (50.85%) than 66.67% of its industry peers.
MSI's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.25% | ||
| PM (TTM) | 14.66% | ||
| GM | 50.85% |
OM growth 3Y7.46%
OM growth 5Y5.26%
PM growth 3Y10.19%
PM growth 5Y5.42%
GM growth 3Y0.78%
GM growth 5Y1%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so MSI is creating value.
MSI has less shares outstanding than it did 1 year ago.
MSI has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, MSI has an improved debt to assets ratio.
2.2 Solvency
MSI has an Altman-Z score of 5.48. This indicates that MSI is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 5.48, MSI belongs to the top of the industry, outperforming 84.31% of the companies in the same industry.
MSI has a debt to FCF ratio of 2.59. This is a good value and a sign of high solvency as MSI would need 2.59 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 2.59, MSI is doing good in the industry, outperforming 60.78% of the companies in the same industry.
MSI has a Debt/Equity ratio of 4.28. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of MSI (4.28) is worse than 88.24% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.28 | ||
| Debt/FCF | 2.59 | ||
| Altman-Z | 5.48 |
ROIC/WACC2.67
WACC9.31%
2.3 Liquidity
MSI has a Current Ratio of 1.25. This is a normal value and indicates that MSI is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.25, MSI is not doing good in the industry: 80.39% of the companies in the same industry are doing better.
MSI has a Quick Ratio of 1.07. This is a normal value and indicates that MSI is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of MSI (1.07) is worse than 70.59% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.25 | ||
| Quick Ratio | 1.07 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 17.41% over the past year.
MSI shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.90% yearly.
Looking at the last year, MSI shows a quite strong growth in Revenue. The Revenue has grown by 8.33% in the last year.
MSI shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.32% yearly.
EPS 1Y (TTM)17.41%
EPS 3Y15.86%
EPS 5Y10.9%
EPS Q2Q%17.24%
Revenue 1Y (TTM)8.33%
Revenue growth 3Y10.41%
Revenue growth 5Y6.32%
Sales Q2Q%9.15%
3.2 Future
MSI is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 11.37% yearly.
The Revenue is expected to grow by 6.57% on average over the next years.
EPS Next Y15.56%
EPS Next 2Y11.33%
EPS Next 3Y10.56%
EPS Next 5Y11.37%
Revenue Next Year8.64%
Revenue Next 2Y7.32%
Revenue Next 3Y6.91%
Revenue Next 5Y6.57%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 34.28, the valuation of MSI can be described as expensive.
Based on the Price/Earnings ratio, MSI is valued a bit cheaper than 64.71% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.46, MSI is valued a bit more expensive.
Based on the Price/Forward Earnings ratio of 31.66, the valuation of MSI can be described as expensive.
The rest of the industry has a similar Price/Forward Earnings ratio as MSI.
MSI is valuated cheaply when we compare the Price/Forward Earnings ratio to 92.56, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 34.28 | ||
| Fwd PE | 31.66 |
4.2 Price Multiples
MSI's Enterprise Value to EBITDA is on the same level as the industry average.
Based on the Price/Free Cash Flow ratio, MSI is valued a bit cheaper than 64.71% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 33.89 | ||
| EV/EBITDA | 27.62 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
MSI has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.2
PEG (5Y)3.14
EPS Next 2Y11.33%
EPS Next 3Y10.56%
5. Dividend
5.1 Amount
With a yearly dividend of 0.92%, MSI is not a good candidate for dividend investing.
MSI's Dividend Yield is rather good when compared to the industry average which is at 10.14. MSI pays more dividend than 80.39% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.27, MSI's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.92% |
5.2 History
The dividend of MSI is nicely growing with an annual growth rate of 11.19%!
MSI has paid a dividend for at least 10 years, which is a reliable track record.
MSI has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)11.19%
Div Incr Years13
Div Non Decr Years13
5.3 Sustainability
40.72% of the earnings are spent on dividend by MSI. This is a bit on the high side, but may be sustainable.
MSI's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP40.72%
EPS Next 2Y11.33%
EPS Next 3Y10.56%
MOTOROLA SOLUTIONS INC
NYSE:MSI (1/31/2025, 6:40:00 PM)
After market: 469.25 0 (0%)469.25
-3.36 (-0.71%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners86.96%
Inst Owner Change-0.68%
Ins Owners0.13%
Ins Owner Change-2.86%
Market Cap78.42B
Analysts83.33
Price Target523.06 (11.47%)
Short Float %1.38%
Short Ratio2.64
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.92% |
Yearly Dividend3.52
Dividend Growth(5Y)11.19%
DP40.72%
Div Incr Years13
Div Non Decr Years13
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)8.17%
Min EPS beat(2)6.65%
Max EPS beat(2)9.69%
EPS beat(4)4
Avg EPS beat(4)8.19%
Min EPS beat(4)6.34%
Max EPS beat(4)10.1%
EPS beat(8)8
Avg EPS beat(8)6.63%
EPS beat(12)12
Avg EPS beat(12)6.13%
EPS beat(16)16
Avg EPS beat(16)6.7%
Revenue beat(2)2
Avg Revenue beat(2)0.34%
Min Revenue beat(2)0.07%
Max Revenue beat(2)0.61%
Revenue beat(4)4
Avg Revenue beat(4)0.44%
Min Revenue beat(4)0.07%
Max Revenue beat(4)0.89%
Revenue beat(8)8
Avg Revenue beat(8)1.2%
Revenue beat(12)11
Avg Revenue beat(12)1.27%
Revenue beat(16)15
Avg Revenue beat(16)1.15%
PT rev (1m)0%
PT rev (3m)15.99%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.47%
EPS NY rev (1m)0%
EPS NY rev (3m)2.82%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.06%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 34.28 | ||
| Fwd PE | 31.66 | ||
| P/S | 7.36 | ||
| P/FCF | 33.89 | ||
| P/OCF | 30.56 | ||
| P/B | 59.14 | ||
| P/tB | N/A | ||
| EV/EBITDA | 27.62 |
EPS(TTM)13.69
EY2.92%
EPS(NY)14.82
Fwd EY3.16%
FCF(TTM)13.85
FCFY2.95%
OCF(TTM)15.35
OCFY3.27%
SpS63.76
BVpS7.93
TBVpS-20.9
PEG (NY)2.2
PEG (5Y)3.14
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.25% | ||
| ROE | 117.8% | ||
| ROCE | 29.17% | ||
| ROIC | 24.81% | ||
| ROICexc | 29.27% | ||
| ROICexgc | 76.24% | ||
| OM | 25.25% | ||
| PM (TTM) | 14.66% | ||
| GM | 50.85% | ||
| FCFM | 21.72% |
ROA(3y)11.22%
ROA(5y)10.11%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)20.8%
ROIC(5y)19.59%
ROICexc(3y)26.29%
ROICexc(5y)24.17%
ROICexgc(3y)94.63%
ROICexgc(5y)75.63%
ROCE(3y)24.45%
ROCE(5y)23.03%
ROICexcg growth 3Y53.44%
ROICexcg growth 5Y26.91%
ROICexc growth 3Y20.22%
ROICexc growth 5Y8.58%
OM growth 3Y7.46%
OM growth 5Y5.26%
PM growth 3Y10.19%
PM growth 5Y5.42%
GM growth 3Y0.78%
GM growth 5Y1%
F-Score6
Asset Turnover0.77
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.28 | ||
| Debt/FCF | 2.59 | ||
| Debt/EBITDA | 1.88 | ||
| Cap/Depr | 75.22% | ||
| Cap/Sales | 2.36% | ||
| Interest Coverage | 12.69 | ||
| Cash Conversion | 84.8% | ||
| Profit Quality | 148.14% | ||
| Current Ratio | 1.25 | ||
| Quick Ratio | 1.07 | ||
| Altman-Z | 5.48 |
F-Score6
WACC9.31%
ROIC/WACC2.67
Cap/Depr(3y)61.58%
Cap/Depr(5y)60.15%
Cap/Sales(3y)2.77%
Cap/Sales(5y)2.88%
Profit Quality(3y)115.93%
Profit Quality(5y)135.27%
High Growth Momentum
Growth
EPS 1Y (TTM)17.41%
EPS 3Y15.86%
EPS 5Y10.9%
EPS Q2Q%17.24%
EPS Next Y15.56%
EPS Next 2Y11.33%
EPS Next 3Y10.56%
EPS Next 5Y11.37%
Revenue 1Y (TTM)8.33%
Revenue growth 3Y10.41%
Revenue growth 5Y6.32%
Sales Q2Q%9.15%
Revenue Next Year8.64%
Revenue Next 2Y7.32%
Revenue Next 3Y6.91%
Revenue Next 5Y6.57%
EBIT growth 1Y17.46%
EBIT growth 3Y18.65%
EBIT growth 5Y11.92%
EBIT Next Year32.84%
EBIT Next 3Y15%
EBIT Next 5Y11.45%
FCF growth 1Y130.94%
FCF growth 3Y8.66%
FCF growth 5Y15.32%
OCF growth 1Y104.79%
OCF growth 3Y8.21%
OCF growth 5Y13.71%