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Let's talk about the popular Motorola Solutions, Inc. (NYSE:MSI). The company's shares saw significant share price movement during recent months on the NYSE, rising to highs of US$482 and falling to the lows of US$395. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Motorola Solutions' current trading price of US$420 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Motorola Solutions’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What's The Opportunity In Motorola Solutions?
According to our valuation model, Motorola Solutions seems to be fairly priced at around 1.71% above our intrinsic value, which means if you buy Motorola Solutions today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $413.38, then there isn’t really any room for the share price grow beyond what it’s currently trading. In addition to this, Motorola Solutions has a low beta, which suggests its share price is less volatile than the wider market.
View our latest analysis for Motorola Solutions
Can we expect growth from Motorola Solutions?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Motorola Solutions' earnings over the next few years are expected to increase by 68%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? MSI’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping tabs on MSI, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.