Motorola Solutions, Inc. (MSI) stock analysis

P/E above its 5-year median

Motorola Solutions's P/E of 43.1 is above its own 5-year median of 35.3.

P/E above the industry

Motorola Solutions's P/E of 43.1 is above the Communications Equipment median of 24.9.

EV/EBITDA above its 5-year median

Motorola Solutions's EV/EBITDA of 26.9 is above its 5-year median of 23.5.

P/B above the industry

Motorola Solutions's price-to-book of 28.86 is above the Communications Equipment median of 2.54.

Trading above fair value

The share price of $535.22 is above our fair value estimate of $356.31.

Margin of safety under 20%

The price is 50.2% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 8.6% a year over the last three fiscal years, short of the 10% we look for.

EPS growing 10%+ a year

Diluted EPS grew 17.2% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -1.5% over the last twelve months, against a 5-year average of 17.8% a year.

Growing faster than the industry

Revenue grew 11.4% over the last twelve months; the Communications Equipment median is 10.9%.

Guidance raised

Motorola Solutions raised its Full-year 2026 revenue outlook on Aug 5, 2026.

Gross margin improving

Gross margin was 52.2% over the last twelve months, against 51.4% a year earlier.

Return on equity over 15%

Return on equity was 77.2% over the last twelve months and averaged 1057% over five years.

Return on capital over 10%

Return on invested capital was 20.2%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Motorola Solutions's return on equity of 77.2% is above the Communications Equipment median of -3.7%.

Earnings grew over 5 years

Net income grew 17.8% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 16.5% over the last twelve months, against a 5-year average of 16.1%.

Net margin above the industry

Motorola Solutions's net margin of 16.5% is above the Communications Equipment median of -2.2%.

High debt

Debt is 329% of shareholders' equity, above the 40% we consider low.

Debt trend

Needs a balance sheet from five years ago with positive equity.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 28.1% of total debt.

Interest well covered

Operating income covers interest expense 6.7 times.

Short-term assets cover short-term debts

Current assets are 1.10 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 4.24; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Motorola Solutions paid dividends worth 0.9% of the share price over the last twelve months.

Yield below Treasuries

The 0.9% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Motorola Solutions yields 0.9%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 37.6% of net income.

Covered by free cash flow

Dividends take 30.9% of free cash flow.