Intrinsic value of Motorola Solutions - MSI

Previous Close

$87.37

  Intrinsic Value

$22.21

stock screener

  Rating & Target

str. sell

-75%

  Value-price divergence*

-76%

Previous close

$87.37

 
Intrinsic value

$22.21

 
Up/down potential

-75%

 
Rating

str. sell

 
Value-price divergence*

-76%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of MSI stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 14.3

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  6.02
  7.40
  7.16
  6.94
  6.75
  6.57
  6.42
  6.28
  6.15
  6.03
  5.93
  5.84
  5.75
  5.68
  5.61
  5.55
  5.49
  5.44
  5.40
  5.36
  5.32
  5.29
  5.26
  5.24
  5.21
  5.19
  5.17
  5.16
  5.14
  5.13
  5.11
Revenue, $m
  6,038
  6,485
  6,949
  7,432
  7,933
  8,455
  8,997
  9,562
  10,150
  10,762
  11,400
  12,066
  12,760
  13,485
  14,241
  15,031
  15,857
  16,721
  17,623
  18,568
  19,557
  20,592
  21,675
  22,810
  23,999
  25,245
  26,551
  27,920
  29,355
  30,859
  32,437
Variable operating expenses, $m
 
  5,098
  5,458
  5,832
  6,221
  6,625
  7,045
  7,483
  7,938
  8,413
  8,908
  9,350
  9,888
  10,450
  11,036
  11,648
  12,288
  12,957
  13,657
  14,389
  15,155
  15,957
  16,797
  17,677
  18,598
  19,564
  20,575
  21,636
  22,748
  23,914
  25,137
Fixed operating expenses, $m
 
  236
  242
  248
  254
  260
  267
  273
  280
  287
  294
  302
  309
  317
  325
  333
  341
  350
  359
  368
  377
  386
  396
  406
  416
  426
  437
  448
  459
  471
  482
Total operating expenses, $m
  4,977
  5,334
  5,700
  6,080
  6,475
  6,885
  7,312
  7,756
  8,218
  8,700
  9,202
  9,652
  10,197
  10,767
  11,361
  11,981
  12,629
  13,307
  14,016
  14,757
  15,532
  16,343
  17,193
  18,083
  19,014
  19,990
  21,012
  22,084
  23,207
  24,385
  25,619
Operating income, $m
  1,061
  1,151
  1,250
  1,352
  1,459
  1,570
  1,685
  1,806
  1,931
  2,062
  2,199
  2,414
  2,562
  2,718
  2,880
  3,050
  3,227
  3,413
  3,608
  3,811
  4,024
  4,248
  4,482
  4,728
  4,985
  5,255
  5,538
  5,836
  6,147
  6,474
  6,818
EBITDA, $m
  1,356
  1,339
  1,446
  1,557
  1,673
  1,793
  1,918
  2,049
  2,185
  2,326
  2,474
  2,629
  2,790
  2,958
  3,134
  3,317
  3,510
  3,711
  3,921
  4,142
  4,373
  4,615
  4,868
  5,134
  5,412
  5,705
  6,011
  6,332
  6,670
  7,024
  7,395
Interest expense (income), $m
  191
  193
  139
  165
  191
  219
  248
  278
  310
  342
  376
  412
  449
  487
  528
  570
  613
  659
  707
  757
  810
  865
  922
  982
  1,046
  1,112
  1,181
  1,253
  1,329
  1,409
  1,493
Earnings before tax, $m
  844
  957
  1,111
  1,187
  1,267
  1,351
  1,437
  1,527
  1,622
  1,720
  1,822
  2,002
  2,114
  2,230
  2,352
  2,480
  2,614
  2,754
  2,900
  3,054
  3,215
  3,383
  3,560
  3,745
  3,940
  4,144
  4,358
  4,582
  4,818
  5,065
  5,325
Tax expense, $m
  282
  259
  300
  321
  342
  365
  388
  412
  438
  464
  492
  541
  571
  602
  635
  670
  706
  744
  783
  825
  868
  913
  961
  1,011
  1,064
  1,119
  1,177
  1,237
  1,301
  1,368
  1,438
Net income, $m
  560
  699
  811
  867
  925
  986
  1,049
  1,115
  1,184
  1,255
  1,330
  1,461
  1,543
  1,628
  1,717
  1,811
  1,908
  2,010
  2,117
  2,229
  2,347
  2,470
  2,599
  2,734
  2,876
  3,025
  3,181
  3,345
  3,517
  3,698
  3,887

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,076
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  8,463
  9,095
  9,746
  10,423
  11,127
  11,858
  12,619
  13,411
  14,236
  15,094
  15,989
  16,923
  17,896
  18,912
  19,973
  21,082
  22,240
  23,451
  24,717
  26,042
  27,429
  28,880
  30,400
  31,992
  33,660
  35,407
  37,238
  39,158
  41,171
  43,281
  45,494
Adjusted assets (=assets-cash), $m
  7,387
  9,095
  9,746
  10,423
  11,127
  11,858
  12,619
  13,411
  14,236
  15,094
  15,989
  16,923
  17,896
  18,912
  19,973
  21,082
  22,240
  23,451
  24,717
  26,042
  27,429
  28,880
  30,400
  31,992
  33,660
  35,407
  37,238
  39,158
  41,171
  43,281
  45,494
Revenue / Adjusted assets
  0.817
  0.713
  0.713
  0.713
  0.713
  0.713
  0.713
  0.713
  0.713
  0.713
  0.713
  0.713
  0.713
  0.713
  0.713
  0.713
  0.713
  0.713
  0.713
  0.713
  0.713
  0.713
  0.713
  0.713
  0.713
  0.713
  0.713
  0.713
  0.713
  0.713
  0.713
Average production assets, $m
  1,073
  1,154
  1,237
  1,323
  1,412
  1,505
  1,602
  1,702
  1,807
  1,916
  2,029
  2,148
  2,271
  2,400
  2,535
  2,676
  2,823
  2,976
  3,137
  3,305
  3,481
  3,665
  3,858
  4,060
  4,272
  4,494
  4,726
  4,970
  5,225
  5,493
  5,774
Working capital, $m
  800
  -292
  -313
  -334
  -357
  -380
  -405
  -430
  -457
  -484
  -513
  -543
  -574
  -607
  -641
  -676
  -714
  -752
  -793
  -836
  -880
  -927
  -975
  -1,026
  -1,080
  -1,136
  -1,195
  -1,256
  -1,321
  -1,389
  -1,460
Total debt, $m
  4,396
  3,155
  3,741
  4,350
  4,983
  5,641
  6,326
  7,039
  7,781
  8,554
  9,359
  10,199
  11,076
  11,990
  12,945
  13,943
  14,985
  16,075
  17,215
  18,407
  19,655
  20,961
  22,329
  23,762
  25,263
  26,835
  28,484
  30,211
  32,023
  33,922
  35,913
Total liabilities, $m
  9,427
  8,186
  8,772
  9,381
  10,014
  10,672
  11,357
  12,070
  12,812
  13,585
  14,390
  15,230
  16,107
  17,021
  17,976
  18,974
  20,016
  21,106
  22,246
  23,438
  24,686
  25,992
  27,360
  28,793
  30,294
  31,866
  33,515
  35,242
  37,054
  38,953
  40,944
Total equity, $m
  -964
  910
  975
  1,042
  1,113
  1,186
  1,262
  1,341
  1,424
  1,509
  1,599
  1,692
  1,790
  1,891
  1,997
  2,108
  2,224
  2,345
  2,472
  2,604
  2,743
  2,888
  3,040
  3,199
  3,366
  3,541
  3,724
  3,916
  4,117
  4,328
  4,549
Total liabilities and equity, $m
  8,463
  9,096
  9,747
  10,423
  11,127
  11,858
  12,619
  13,411
  14,236
  15,094
  15,989
  16,922
  17,897
  18,912
  19,973
  21,082
  22,240
  23,451
  24,718
  26,042
  27,429
  28,880
  30,400
  31,992
  33,660
  35,407
  37,239
  39,158
  41,171
  43,281
  45,493
Debt-to-equity ratio
  -4.560
  3.470
  3.840
  4.170
  4.480
  4.760
  5.010
  5.250
  5.470
  5.670
  5.850
  6.030
  6.190
  6.340
  6.480
  6.610
  6.740
  6.850
  6.960
  7.070
  7.170
  7.260
  7.350
  7.430
  7.510
  7.580
  7.650
  7.720
  7.780
  7.840
  7.890
Adjusted equity ratio
  -0.276
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  560
  699
  811
  867
  925
  986
  1,049
  1,115
  1,184
  1,255
  1,330
  1,461
  1,543
  1,628
  1,717
  1,811
  1,908
  2,010
  2,117
  2,229
  2,347
  2,470
  2,599
  2,734
  2,876
  3,025
  3,181
  3,345
  3,517
  3,698
  3,887
Depreciation, amort., depletion, $m
  295
  188
  196
  205
  214
  223
  233
  243
  253
  264
  276
  215
  227
  240
  253
  268
  282
  298
  314
  331
  348
  367
  386
  406
  427
  449
  473
  497
  523
  549
  577
Funds from operations, $m
  1,104
  887
  1,007
  1,072
  1,139
  1,209
  1,282
  1,358
  1,437
  1,520
  1,606
  1,676
  1,770
  1,868
  1,971
  2,078
  2,190
  2,308
  2,431
  2,560
  2,695
  2,836
  2,985
  3,140
  3,303
  3,474
  3,654
  3,842
  4,040
  4,247
  4,465
Change in working capital, $m
  -61
  -20
  -21
  -22
  -23
  -23
  -24
  -25
  -26
  -28
  -29
  -30
  -31
  -33
  -34
  -36
  -37
  -39
  -41
  -43
  -44
  -47
  -49
  -51
  -54
  -56
  -59
  -62
  -65
  -68
  -71
Cash from operations, $m
  1,165
  907
  1,028
  1,094
  1,162
  1,233
  1,307
  1,383
  1,464
  1,547
  1,635
  1,706
  1,801
  1,901
  2,005
  2,114
  2,228
  2,347
  2,472
  2,602
  2,739
  2,883
  3,033
  3,191
  3,357
  3,530
  3,712
  3,904
  4,104
  4,315
  4,536
Maintenance CAPEX, $m
  0
  -107
  -115
  -124
  -132
  -141
  -150
  -160
  -170
  -181
  -192
  -203
  -215
  -227
  -240
  -253
  -268
  -282
  -298
  -314
  -331
  -348
  -367
  -386
  -406
  -427
  -449
  -473
  -497
  -523
  -549
New CAPEX, $m
  -271
  -81
  -83
  -86
  -89
  -93
  -97
  -101
  -105
  -109
  -114
  -118
  -124
  -129
  -135
  -141
  -147
  -154
  -161
  -168
  -176
  -184
  -193
  -202
  -212
  -222
  -232
  -244
  -255
  -268
  -281
Cash from investing activities, $m
  -1,002
  -188
  -198
  -210
  -221
  -234
  -247
  -261
  -275
  -290
  -306
  -321
  -339
  -356
  -375
  -394
  -415
  -436
  -459
  -482
  -507
  -532
  -560
  -588
  -618
  -649
  -681
  -717
  -752
  -791
  -830
Free cash flow, $m
  163
  719
  830
  884
  940
  999
  1,059
  1,123
  1,189
  1,258
  1,329
  1,385
  1,463
  1,545
  1,630
  1,720
  1,813
  1,911
  2,013
  2,120
  2,233
  2,350
  2,474
  2,603
  2,739
  2,881
  3,031
  3,187
  3,352
  3,524
  3,706
Issuance/(repayment) of debt, $m
  -13
  -1,241
  586
  609
  633
  658
  685
  713
  742
  773
  806
  840
  876
  915
  955
  997
  1,042
  1,090
  1,140
  1,192
  1,248
  1,306
  1,368
  1,433
  1,501
  1,573
  1,648
  1,728
  1,811
  1,899
  1,992
Issuance/(repurchase) of shares, $m
  -749
  1,175
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -762
  -66
  586
  609
  633
  658
  685
  713
  742
  773
  806
  840
  876
  915
  955
  997
  1,042
  1,090
  1,140
  1,192
  1,248
  1,306
  1,368
  1,433
  1,501
  1,573
  1,648
  1,728
  1,811
  1,899
  1,992
Total cash flow (excl. dividends), $m
  -670
  652
  1,416
  1,493
  1,573
  1,657
  1,744
  1,836
  1,931
  2,031
  2,135
  2,225
  2,339
  2,459
  2,585
  2,717
  2,855
  3,001
  3,153
  3,313
  3,481
  3,657
  3,842
  4,036
  4,240
  4,454
  4,679
  4,915
  5,163
  5,424
  5,697
Retained Cash Flow (-), $m
  858
  -1,874
  -65
  -68
  -70
  -73
  -76
  -79
  -82
  -86
  -90
  -93
  -97
  -102
  -106
  -111
  -116
  -121
  -127
  -132
  -139
  -145
  -152
  -159
  -167
  -175
  -183
  -192
  -201
  -211
  -221
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  -1,222
  1,351
  1,425
  1,503
  1,584
  1,668
  1,756
  1,848
  1,945
  2,046
  2,131
  2,242
  2,358
  2,479
  2,606
  2,740
  2,880
  3,026
  3,180
  3,342
  3,512
  3,690
  3,877
  4,073
  4,279
  4,496
  4,723
  4,962
  5,213
  5,476
Discount rate, %
 
  10.90
  11.45
  12.02
  12.62
  13.25
  13.91
  14.61
  15.34
  16.10
  16.91
  17.75
  18.64
  19.57
  20.55
  21.58
  22.66
  23.79
  24.98
  26.23
  27.54
  28.92
  30.37
  31.89
  33.48
  35.15
  36.91
  38.76
  40.69
  42.73
  44.87
PV of cash for distribution, $m
 
  -1,102
  1,088
  1,014
  934
  850
  764
  676
  590
  507
  429
  353
  288
  231
  181
  139
  104
  76
  55
  38
  26
  17
  11
  7
  4
  2
  1
  1
  0
  0
  0
Current shareholders' claim on cash, %
  100
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0

Motorola Solutions, Inc. provides mission-critical communication infrastructure, devices, accessories, software, and services in North America, Latin America, the Asia Pacific, the Middle East, Europe, and Africa. The company operates in two segments, Products and Services. The Products segment offers a portfolio of infrastructure, devices, accessories, and software for government, public safety and first-responder agencies, municipalities, and commercial and industrial customers. This segmentÂ’s products include two-way portable radios and vehicle-mounted radios; accessories, such as speaker microphones, batteries, earpieces, headsets, carry cases, and cables; software features and upgrades; and radio network core and central processing software, base stations, consoles, repeaters, and software applications and features. The Services segment provides integration services, such as implementation, optimization, and integration of networks, devices, software, and applications; and managed and support services, such as repair, technical support, and hardware maintenance services, as well as network monitoring, software maintenance, and cyber security services across radio network technologies, command center consoles, and smart public safety solutions. This segment also offers Integrated Digital Enhanced Network (iDEN), a push-to-talk technology, as well as provides iDEN services, including hardware and software maintenance services for its legacy iDEN customers. The company was formerly known as Motorola, Inc. and changed its name to Motorola Solutions, Inc. in January 2011. Motorola Solutions, Inc. was founded in 1928 and is headquartered in Chicago, Illinois.

FINANCIAL RATIOS  of  Motorola Solutions (MSI)

Valuation Ratios
P/E Ratio 25.7
Price to Sales 2.4
Price to Book -14.9
Price to Tangible Book
Price to Cash Flow 12.4
Price to Free Cash Flow 16.1
Growth Rates
Sales Growth Rate 6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 54.9%
Cap. Spend. - 3 Yr. Gr. Rate 9.9%
Financial Strength
Quick Ratio 269
Current Ratio 0
LT Debt to Equity -455.6%
Total Debt to Equity -456%
Interest Coverage 5
Management Effectiveness
Return On Assets 8.2%
Ret/ On Assets - 3 Yr. Avg. 9.4%
Return On Total Capital 14.6%
Ret/ On T. Cap. - 3 Yr. Avg. 15.8%
Return On Equity -104.7%
Return On Equity - 3 Yr. Avg. -5.9%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 47.5%
Gross Margin - 3 Yr. Avg. 47.8%
EBITDA Margin 22%
EBITDA Margin - 3 Yr. Avg. 9.7%
Operating Margin 17.6%
Oper. Margin - 3 Yr. Avg. 5.7%
Pre-Tax Margin 14%
Pre-Tax Margin - 3 Yr. Avg. 3.4%
Net Profit Margin 9.3%
Net Profit Margin - 3 Yr. Avg. 14%
Effective Tax Rate 33.4%
Eff/ Tax Rate - 3 Yr. Avg. 34.4%
Payout Ratio 50%

MSI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MSI stock intrinsic value calculation we used $6038 million for the last fiscal year's total revenue generated by Motorola Solutions. The default revenue input number comes from 2016 income statement of Motorola Solutions. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our MSI stock valuation model: a) initial revenue growth rate of 7.4% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 10.9%, whose default value for MSI is calculated based on our internal credit rating of Motorola Solutions, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Motorola Solutions.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of MSI stock the variable cost ratio is equal to 78.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $230 million in the base year in the intrinsic value calculation for MSI stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4.4% for Motorola Solutions.

Corporate tax rate of 27% is the nominal tax rate for Motorola Solutions. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the MSI stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for MSI are equal to 17.8%.

Life of production assets of 10 years is the average useful life of capital assets used in Motorola Solutions operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for MSI is equal to -4.5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $-964 million for Motorola Solutions - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 164.041 million for Motorola Solutions is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Motorola Solutions at the current share price and the inputted number of shares is $14.3 billion.

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COMPANY NEWS

▶ [$$] Static Ahead for Motorola Solutions?   [Aug-19-17 12:00AM  Barrons.com]
▶ Motorola Is Developing Self-Healing Phone Screens   [Aug-17-17 09:26AM  Fortune]
▶ L.A. to launch cybersecurity threat partnership with businesses   [Aug-15-17 03:00PM  American City Business Journals]
▶ Motorola beats Street 2Q forecasts   [Aug-03-17 05:20PM  Associated Press]
▶ What Analysts Think about Motorola Stock in July 2017   [Aug-01-17 07:41AM  Market Realist]
▶ How Is Motorola Solutions Increasing Shareholder Value?   [Jul-31-17 06:05PM  Market Realist]
▶ Airbus Agrees to Sell Software Unit to Motorola   [Jul-28-17 09:55AM  TheStreet.com]
▶ Motorola Is Releasing a Shatterproof Phone   [Jul-26-17 05:22PM  Investopedia]
▶ Broward County on Leading Edge of Emergency Communications   [Jul-10-17 09:00AM  Business Wire]
▶ Three Companies the iPhone Killed   [Jun-30-17 01:39PM  Investopedia]
▶ Seattle data firm Socrata names Microsoft, Salesforce veteran as top sales exec   [Jun-19-17 08:15PM  American City Business Journals]
▶ Acacia Research as an Investment Opportunity   [Jun-09-17 03:11PM  GuruFocus.com]
▶ ShotSpotter's shares shoot up in debut   [Jun-07-17 10:47AM  Reuters]
▶ Story Stocks from Briefing.com   [May-05-17 12:39PM  Briefing.com]
▶ Motorola tops Street 1Q forecasts   [May-04-17 04:48PM  Associated Press]
▶ How Motorola Solutions Navigated Away From Bankruptcy   [Apr-25-17 05:45PM  Fortune Videos]
▶ New Strong Buy Stocks for April 19th   [Apr-19-17 09:52AM  Zacks]
▶ Moto G5 Vs Moto G5 Plus: What's the Difference?   [Apr-17-17 07:30PM  Forbes]
▶ 10 Companies That Failed To Innovate and Change   [Apr-10-17 01:12PM  Insider Monkey]
Stock chart of MSI Financial statements of MSI
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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