Motorola Solutions, Inc. (NYSE: MSI)

Sector: Technology Industry: Communication Equipment CIK: 0000068505
Market Cap 76.26 Bn
P/B 31.64
P/E 35.40
P/S 6.53
ROIC (Qtr) 18.67
Div Yield % 0.98
Rev 1y % (Qtr) 12.26
Total Debt (Qtr) 9.63 Bn
Debt/Equity (Qtr) 4.00
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About

Investment thesis

Bull case

  • Operating cash flow of 2.84B provides exceptional 472.83x coverage of minority interest expenses 6M, showing strong core operations.
  • Strong operating cash flow of 2.84B provides 1.52x coverage of SG&A expenses 1.87B, showing efficient operational cost management.
  • Robust free cash flow of 2.57B exceeds capital expenditure of 265M by 9.71x, indicating strong organic growth funding capability.
  • Robust tangible asset base of 9.48B provides 42.73x coverage of working capital 222M, indicating strong operational backing.
  • Cash position of 1.17B provides exceptional 194.17x coverage of minority interest expenses 6M, indicating strong liquidity.

Bear case

  • Operating cash flow of 2.84B barely covers its investment activities of (5.16B), with a coverage ratio of -0.55, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 2.84B provides thin coverage of dividend payments of (728M) with a -3.90 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Investment activities of (5.16B) provide weak support for R&D spending of 970M, which is -5.32x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 1.17B provide limited coverage of acquisition spending of (4.92B), which is -0.24x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 2.84B provides insufficient coverage of deferred revenue obligations of 2.27B, which is 1.25x, raising concerns about future service delivery capabilities.

Segments Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

Peer comparison

Companies in the Communication Equipment
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 CSCO Cisco Systems, Inc. 305.09 Bn 27.54 5.17 30.09 Bn
2 MSI Motorola Solutions, Inc. 76.26 Bn 35.40 6.53 9.63 Bn
3 CIEN Ciena Corp 42.86 Bn 347.51 8.99 1.58 Bn
4 UI Ubiquiti Inc. 42.08 Bn 47.35 14.16 0.11 Bn
5 LITE Lumentum Holdings Inc. 41.73 Bn 165.86 19.82 3.32 Bn
6 HPE Hewlett Packard Enterprise Co 28.79 Bn 7.76 1.03 22.37 Bn
7 ASTS AST SpaceMobile, Inc. 22.73 Bn -74.80 1,226.44 0.72 Bn
8 ZBRA Zebra Technologies Corp 13.26 Bn 31.65 2.46 2.66 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 4.39 2.66
EV to Cash from Ops. EV/CFO 30.02 14.95
EV to Debt EV to Debt 8.84 37.29
EV to EBIT EV/EBIT 27.40 201.55
EV to EBITDA EV/EBITDA 24.96 9.12
EV to Free Cash Flow [EV/FCF] EV/FCF 33.12 66.04
EV to Market Cap EV to Market Cap 1.12 1.10
EV to Revenue EV/Rev 7.29 32.52
Price to Book Value [P/B] P/B 31.64 6.31
Price to Earnings [P/E] P/E 35.40 12.21
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 2.96 0.64
Dividend Payout Ratio % Div Payout % (Qtr) 34.60 -19.58
Dividend per Basic Share Div per Share (Qtr) 4.48 0.23
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 29.02 5.02
Interest Coverage Int. cover (Qtr) 10.29 -10.88
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -3.11 -65.39
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -44.58 457.29
Dividend Growth (1y) % Div 1y % (Qtr) 11.17 1.57
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 35.64 67.92
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 12.86 -9.76
EBIT Growth (1y) % EBIT 1y % (Qtr) 41.66 67.42
EBT Growth (1y) % EBT 1y % (Qtr) 42.65 -72.72
EPS Growth (1y) % EPS 1y % (Qtr) 36.83 5.66
FCF Growth (1y) % FCF 1y % (Qtr) 20.52 -2.41
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 9.49 36.14
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.60 0.75
Cash Payout Ratio Cash Payout (Qtr) 0.23 0.03
Cash Ratio Cash Ratio (Qtr) 0.19 1.34
Current Ratio Curr Ratio (Qtr) 1.04 2.99
Debt to Equity Ratio Debt/Equity (Qtr) 4.00 0.46
Interest Cover Ratio Int Coverage (Qtr) 10.29 -10.88
Times Interest Earned Times Interest Earned (Qtr) 10.29 -10.88
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 30.20 -41.18
EBIT Margin % EBIT Margin % (Qtr) 26.61 -52.62
EBT Margin % EBT Margin % (Qtr) 24.02 -59.46
Gross Margin % Gross Margin % (Qtr) 51.70 38.53
Net Profit Margin % Net Margin % (Qtr) 18.40 -60.82