Motorola Solutions, Inc. (MSI) — Fundamental Analysis & Key Financial Ratios

Kaplio's reading: Motorola Solutions, Inc.

Updated on October 26, 2026 · accounts published on August 5, 2026

Reading of October 23, 2026: A highly profitable business with record margins that carries a heavy debt load

Motorola Solutions trades at a P/E of 37.9, 24 % above its sector median, with a record 25 % operating margin over the last 12 months.

• Is Motorola Solutions expensive or cheap? Its P/E of 37.9 is 24 % above the sector median of 30.5 and higher than in 69 % of the past decade.
• How is the business doing? Operating margin of 25 % over the last 12 months, against a 17 % average for fiscal 2014-2025; fiscal 2025 set the record.
• How strong is the balance sheet? Net debt of 2.4× EBITDA in fiscal 2025 exceeds the 2.0× tolerated for telecom equipment; the dividend has risen 11 years running.
• What to expect from the next earnings? Analysts expect EPS of $4.42 on November 4, 2026; Motorola Solutions has beaten estimates in each of the last 8 quarters.
• Does it grow with real cash or by diluting shareholders? Free cash flow was 22 % of revenue in fiscal 2025 and stock-based pay just 2.5 %, but revenue per share grew 8.9 % a year.

Is Motorola Solutions expensive or cheap?

Over the last 12 months Motorola Solutions trades at a P/E of 37.9, 11 % above its ten-year median of 34.2. Over the decade the P/E ranged from 23.8 to 51.0. The stock is far from its peak multiple, but it has been cheaper than today 69 % of the time. Against 359 sector peers with a median P/E of 30.5, the premium is 24 %. The EV/EBITDA of 23.6× sits right on its five-year average of 23.5×, and a free cash flow yield of 3.8 % is thin. With the shares 2 % below their 52-week high of $491.24, investors are paying a full multiple for quality.

How is the business doing?

Revenue grew 8 % over the last 12 months while EPS rose 38 %, so profits are expanding much faster than sales. The operating margin of 25 % compares with an average of 17 % across fiscal 2014-2025, and fiscal 2025, at 25 %, was the best of those 12 years. ROIC of 16.4 % over the last 12 months is double the sector median of 8.2 %. It has stayed above 10 % in 9 of the last 10 fiscal years, with 2017 the only exception at −3.4 %. The ROE of 86 % is inflated by a small equity base, so ROIC is the more honest gauge.

How strong is the balance sheet?

Debt is the weak spot. In fiscal 2025, net debt was $53.95 per share, 11 % of the current share price, and 2.4× EBITDA. That is above the 2.0× ceiling considered tolerable for telecom equipment makers. Debt to equity of 3.6× and a current ratio of 1.1 over the last 12 months leave little cushion. Even so, an Altman Z of 3.6 sits in the safe zone, while the Piotroski score is a middling 5 of 9. The dividend yields 1.0 % and has been raised for 11 consecutive fiscal years. The payout was 34 % of fiscal 2025 earnings, which leaves room to keep raising it.

What to expect from the next earnings?

The next report is due November 4, 2026, with consensus at $4.42 per share for the quarter. That bar is barely above the $4.41 delivered on August 5, 2026, when EPS beat the $3.85 expected by 14.5 %. After 8 beats in the last 8 quarters, the target looks modest. The fiscal 2026 EPS consensus of $17.71 has not moved in 30 days, and revenue estimates are equally stable, so analysts are not raising the bar. Of 34 analysts, 24 rate the stock a buy, 6 a hold and 4 a sell. The key test is whether margins hold near the record.

Does it grow with real cash or by diluting shareholders?

In technology, generic ratios fall short. What matters is growth, pricing power and dilution from stock-based pay, because shares handed to employees can quietly eat into per-share returns. Motorola Solutions passes most of these tests. In fiscal 2025, stock-based pay was 2.5 % of revenue, well under the 10 % healthy limit, and free cash flow reached 22 % of revenue, above the 20 % bar. A gross margin of 50 % clears the 35 % threshold for telecom equipment, and ROIC of 16.4 % narrowly beats 15 %. The miss is growth: revenue per share rose 8.9 % a year over fiscal 2022-2025, short of the 15 % healthy mark.

How this was prepared: the data comes from companies' official filings, collected by a professional provider, and from Kaplio's analysis engine (trailing-12-month ratios, 10 years of history and sector medians computed across US-listed companies). The text is written from that data alone, every figure is checked against it before publication, and it is reviewed when the company reports results. This is not investment advice.