Overview of Motorola Solutions, INC & Intrinsic Value calculation
Motorola Solutions, INC build and connect technologies to help protect people, property and places , enabling critical collaboration between public safety agencies and enterprises for a proactive approach to safety and security. https://www.motorolasolutions.com/en_xp/about.html is global leader in public safety and enterprise security , grounded in nearly 100 years of close customer and community collaboration.
Motorola Solutions, INC manage business through two segments Products and Systems Integration and Software and Services.
Net sales increased by $866 Million, or 10% compared to 2022. Gross profit margin was 49.8% of net sales in 2023 compared to 46.4% of net sales in 2022.
FCFE Details of Motorola Solutions, INC. shown below, US$ in millions, except per share data
|
Year |
Value |
FCFE or Terminal Value |
Present Value at 13.62% |
|
0 |
FCFE0 |
2,146 |
2,146 |
|
1 |
FCFE1 |
2,382 |
1,933 |
|
2 |
FCFE2 |
2,641 |
1,937 |
|
3 |
FCFE3 |
2,927 |
1,942 |
|
4 |
FCFE4 |
3,241 |
1,948 |
|
5 |
FCFE5 |
3,585 |
1,956 |
|
5 |
Terminal Value (TV5) |
121,174 |
73,121 |
|
Intrinsic value of Motorola Solutions, INC |
$84,983 |
|
Market cap of Motorola Solutions, INC |
$79.59 Billion |
|
Intrinsic value of Motorola Solutions, INC common stock (per share) |
$509.19 |
|
Current share price on 10/21/2024 |
$477.10 |
Required rate of Return
Assumptions
|
Rate of return on LT Treasury Composite(Rf) |
4.36% |
|
Expected rate of return on market portfolio(E(RM) |
13.81% |
|
Systematic risk of Motorola Solutions, INC. Common stock (β) |
0.598 |
|
Required rate of return on Intuit Inc. Common Stock (r) Calculation : Rf + β(E(RM)- (Rf) = 4.36% +0.52[13.81% - 4.36%] |
13.62% |
FCFE Growth rate Forecast
Motorola Solutions, INC. H-Model
|
Year |
Value |
Growth Rate |
|
1 |
g1 (PRAT Model) |
11% |
|
2 |
g2 (Linear Interpolation) |
10.9% |
|
3 |
g3 (Linear Interpolation) |
10.81% |
|
4 |
g4 (Linear Interpolation) |
10.72% |
|
5 |
g5 (Single stage model) |
10.63% |
2023 Calculations
|
Retention rate |
65.63% |
|
Gross Profit Margin |
49.8% |
|
Profit margin |
17.77% |
|
Asset turnover |
0.74 |
|
EPS |
10.26 |
|
PE Ratio |
46.5 |
Sources : Form 10K of Motorola Solutions, INC for the fiscal year 2024, https://www.motorolasolutions.com/investors/earnings-and-sec-filings.html, https://www.stock-analysis-on.net/ , https://finance.yahoo.com/ , https://companiesmarketcap.com/
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