Is Motorola Solutions Inc (MSI) overvalued?
On Equity Rank's model estimate, MSI trades 26% above its fair value. Motorola Solutions Inc (MSI) last closed at $514.51; the multi-method model fair value is $408.18.
| Price | Model fair value | Price vs model |
|---|---|---|
| $514.51 | $408.18 | 26% above |
What the answer rests on
- 1 of 10 valuation methods put MSI's value above its price and 9 put it below, so the methods mostly agree.
- To justify today's price, MSI's free cash flow would need to grow about 11.1% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 18.0% a year.
- MSI trades at 39.1 times its last year's earnings, against a median of 34.2 for 18 profitable Technology companies.
- Over the past year the price sat below the model fair value on 0% of trading days. The gap ranged from 9% above to 27% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind MSI's fair value · What prices assume · Other companies