Communication infrastructure company Motorola Solutions (MSI) has generated a return of 33% in the last 12 months. Since the start of 2019, the stock has risen 26.4%. It’s gained 92% in the last three years and 130% in the last five years.
Motorola’s rise in sales has driven its market cap growth. The company’s revenue rose from $5.9 billion in 2014 to $7.34 billion in 2018. Its EPS have also risen at a CAGR (compound annual growth rate) of 25% in the last five years.
Ready to put your morning scrolling to use? Sign up for Bagels & Stox, our witty take on the top market and investment news straight to your inbox! Whether you’re a serious investor or just want to be informed, Bagels & Stox will be your favorite email.
MSI stock is currently trading 0.01% below its 52-week high of $144.81 and 38% above its 52-week low of $90.28. With a relative strength index score of 69, MSI stock is trading very close to overbought territory.
Is MSI overvalued?
Motorola has a forward PE ratio of 22.4x for 2019. For 2020, this ratio is 19.8x. Analysts expect its sales to rise 6.8% in 2019 and 4.8% in 2020. Its EPS are expected to rise 7% in 2019 and 10.3% in 2020.
The company’s EPS could grow at a CAGR of 14% over the next five years. Its stock looks overvalued even if we take into account its dividend yield of 1.6%.
Of the 15 analysts covering MSI, ten have given it “buy” recommendations, four have given it “hold” recommendations, and one has given it a “sell” recommendation. The average 12-month target price for MSI is $149.30, which indicates a potential upside of 3% from its current level.