Key Stats for Motorola Solutions Stock
- Past week’s performance: 2%
- 52-week range: $359.36 to $492.22
- Valuation model target price: $516.72
- Implied upside: 22.4% over the next 1.9 years
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What Happened?
Motorola Solutions, Inc. (MSI) stock traded around the low‑$420s this week, staying close to recent highs as the market waits for the company’s fourth‑quarter 2025 earnings report on February 11.
The shares have recovered from a pullback after the late‑2025 acquisition of Silvus Technologies and are now up solidly in early 2026, reflecting renewed confidence in the company’s growth and cash‑flow profile.
Analysts expect another strong quarter, with consensus calling for revenue of about $3.34 billion and adjusted EPS of roughly $4.36, both above the prior‑year period.
Guidance from the third‑quarter release suggested fourth‑quarter revenue growth of approximately 11% year over year and non‑GAAP EPS between $4.30 and $4.36, so investors will be watching whether MSI can extend its streak of earnings beats.
The $4.4 billion Silvus acquisition increased leverage, but MSI’s free‑cash‑flow margins, which have hovered near 20% in recent years, give it the capacity to reduce debt over the next 18–24 months while still funding dividends and buybacks.
That balance between growth investment and shareholder returns helps support the current valuation, where the stock trades at a P/E ratio in the low‑30s and carries a market capitalization of around $70 billion.
Institutional investors have continued to accumulate shares, with recent filings showing firms like Envestnet Asset Management increasing positions, and this steady demand has helped the stock grind higher even before Q4 results are released.
As a result, short‑term moves now largely reflect expectations around upcoming earnings and integration progress at Silvus rather than any abrupt shift in end‑market demand for public‑safety and enterprise security solutions.
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Is Motorola Solutions Stock Undervalued?
Under the valuation model assumptions realized through 2027, the stock is modeled using:
- Revenue growth (CAGR): 7.2%
- Operating margins: 30.7%
- Exit P/E multiple: 26.8x
Based on these inputs, the model estimates a target price of $516.72, implying a 22.4% total return from the current share price of $422.18 and an annualized return of 11.2% over the next 1.9 years.
The revenue‑growth assumption aligns with expectations for mid‑single‑ to high‑single‑digit expansion, supported by demand for mission‑critical communications, video security, and software across public‑safety and enterprise customers, as reflected in MSI’s rising backlog.
Operating margins above 30% assume that the company continues shifting its mix toward higher‑margin software and services while leveraging scale and recurring revenue to offset integration costs and higher interest expense from the Silvus deal.
Cash‑flow data backs up those assumptions because MSI generated free cash flow of roughly $2.1–2.3 billion in the most recent fiscal year, with free‑cash‑flow margins around 20%, and has a track record of double‑digit growth in that metric.
If Motorola Solutions delivers on its Q4 2025 earnings guidance, integrates Silvus smoothly, and maintains high renewal and attachment rates in its software and services businesses, the current valuation model indicates the stock could generate low‑double‑digit annualized returns from here.
However, any disappointment on margins, slower backlog conversion, or higher‑than‑expected costs from recent deals could pressure the multiple, so investors will be paying close attention to February’s earnings call and management’s 2026 outlook.
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