MSI
Motorola Solutions, Inc.
$404.08
Platform & Compounding FCF
80%
Two-stage FCF DCF
Mild
·
Conviction
Overvalued
Trading 11.6% above fair value
You pay
$404.08
Bear
$234.21
Fair
$362.21
Bull
$494.69
Bear
$234.21
-42.0%
7% stage 1 growth, 11% discount
Fair
$362.21
-10.4%
12% stage 1 growth, 11% discount
Bull
$494.69
+22.4%
16% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (12% base case)
Terminal Value % of EV
41%
Implied Market Multiple
32.2x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $496.67 from 34 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $362.21 per share.
Warnings
Wall Street's average price target is $496.67 (from 34 analysts). Our estimate is 39% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions