Motorola Solutions, Inc. (MSI): A Bull Case Theory

We came across a bullish thesis on Motorola Solutions, Inc. (MSI) on Twitter by RadnorCapital. In this article, we will summarize the bulls’ thesis on MSI. Motorola Solutions, Inc.’s share was trading at $477.62 as of Oct 17^th. MSI’s trailing and forward P/E were 55.93 and 32.05 respectively according to Yahoo Finance.

Motorola Solutions (MSI) is a global leader in mission-critical communications, providing technology solutions that ensure public safety and enterprise security. The company’s operations are centered around three core areas: land mobile radio (LMR), video security, and command center software.

MSI generates the majority of its revenue (75%) from LMR, maintaining a dominant 70% global market share. Their innovative radio features, such as quad-band radios and over-the-air updates, allow MSI to charge premiums for upgrades. Additionally, the company benefits from its end-to-end ecosystem, which integrates LMR, video, and software, giving it a competitive edge over point products in the market.

Investing in MSI is compelling due to its resilient position in public safety communications, a highly defensive sector. First responders view MSI’s LMR radios as essential, ensuring consistent funding regardless of budget constraints. The company is poised for margin expansion across all product lines while investing in R&D to incorporate AI advancements. Despite competition from Axon, MSI’s total addressable market ($70 billion) overlaps minimally with Axon (just 3%). Motorola’s comprehensive ecosystem makes it difficult for competitors to disrupt its stronghold reaffirming the Outperform rating on the share.

RadnorCapital hasn’t provided any projections about MSI’s future profitability. Right now, the stock doesn’t look very cheap at a forward PE of 32. It grew its topline by about 10% in 2023 and about the same annualized rate so far in 2024.

Motorola Solutions, Inc. is also not on our list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 42 hedge fund portfolios held MSI at the end of the second quarter which was 43 in the previous quarter. While we acknowledge the risk and potential of MSI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MSI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: Analyst Sees a New $25 Billion “Opportunity” for NVIDIA and 10 Best of Breed Stocks to Buy For The Third Quarter of 2024 According to Bank of America.

Disclosure: None. This article was originally published at Insider Monkey.