We came across a bullish thesis on Motorola Solutions, Inc. (NYSE:MSI) on Twitter by RadnorCapital. In this article, we will summarize the bulls’ thesis on MSI. Motorola Solutions, Inc. (NYSE:MSI)’s share was trading at $471.31 as of Dec 26th. MSI’s trailing and forward P/E were 51.62 and 31.95 respectively according to Yahoo Finance.
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Motorola Solutions (NYSE:MSI) is positioned as a dominant player in public safety communications and video solutions, leveraging its strong market position to capitalize on long-term growth opportunities. The company’s hybrid 5G cellular and LMR (Land Mobile Radio) systems underscore its technological leadership, as cellular technology, once seen as a competitor, is now complementary to its private network offerings. Motorola remains the global leader in public safety radio systems and services, benefiting from robust government funding and increasing demand for technology modernization driven by record stimulus measures. Despite constrained budgets, municipalities and local governments continue to prioritize investments in public safety technology, creating a favorable demand environment that management deems the strongest in three decades.
The company is poised to benefit from growing demand in the video solutions market, spurred by U.S. restrictions on Chinese vendors like Hikvision and Dahua and rising concerns over gun violence in schools and public spaces. This has led to increased spending on video surveillance and AI-driven software solutions, further strengthening Motorola’s growth prospects. Management expects EPS to grow steadily from $11.95 in 2023 to $13.65 in 2024 and $14.53 in 2025, reflecting its ability to execute effectively despite macroeconomic challenges.
Motorola has maintained a disciplined capital allocation strategy, deploying cash on acquisitions, dividends, and stock buybacks, which bolsters shareholder returns. The company trades at a premium valuation of 34 times forward-year EPS, surpassing its pre-pandemic and 2021 peak multiples. This premium reflects investor confidence in its resiliency and growth trajectory. With its strong competitive positioning and alignment with key government priorities, Motorola is well-positioned to deliver annual stock returns that at least match its EPS growth, making it a compelling investment in a resilient and expanding market.
Motorola Solutions, Inc. (NYSE:MSI) is not on our list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 48 hedge fund portfolios held MSI at the end of the third quarter which was 42 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.
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Disclosure: None. This article was originally published at Insider Monkey.