QS Research · Michael Burry's Scion Capital analyst template · 2006
Motorola Solutions, Inc. (MSI)
As of 2026-11-08 · 12/15 boxes filled from SEC filings and market data
Conclusion: PASS
Conviction low · base case none · downside -22% · upside +22%
The market is not missing the operating story: record $16.6B backlog, raised FY2026 guidance to ~$13.050B revenue, $17.94-$17.99 non-GAAP EPS and $3.050B operating cash flow, and TTM FCF of $2.53B are visible. But at today's 25.9x EV/EBITDA, 40.8x P/E and 27.72x book, the base case at the company's own multiple is today's $514.51. Holding the multiple constant, a 20% EBITDA decline (to $2.912B) gives $2.912B x 25.9 = $75.4B EV, less $9.34B net debt = $66.1B equity / 165.33M shares = about $400, or -22%; a 20% EBITDA increase (to $4.368B) gives $4.368B x 25.9 = $113.1B EV, less $9.34B net debt = $103.8B / 165.33M = about $628, or +22%. No cited non-valuation catalyst justifies a different multiple, and the roughly symmetric range offers no deep-value edge; this is a pass, not a short, because the franchise, backlog and cash generation are real.
Key numbers
- Share price: $514.51
- Market cap: $85.07B
- Latest financial period: TTM to Oct 3, 2026
- Revenue (TTM): $12.60B
- EV / EBITDA (TTM): 25.9x
- P/E (TTM): 40.8x
- Price / book: 27.72x
The 15 boxes
- ✓ 1. Long-form business notes
Motorola Solutions makes money by selling mission-critical communications (MCN), video security/access control, and command-center software, organized into Products and Systems Integration and Software and Services. In 2025 the segments were $7.3B (62% of consolidated net sales) and $4.4B (38%), with MCN still the largest product line inside both segments. From 2020 to 2025 revenue rose from $7.41B to $11.68B and operating cash flow from $1.61B to $2.84B; the portfolio changed via the August 2025 Silvus acquisition and the renaming of LMR to MCN.
- ✓ 2. Competitive advantage
MSI shows a scaled, mission-critical installed base (more than 100,000 customers in over 100 countries), P25/TETRA/DMR leadership, patents and $970M of 2025 R&D, plus a $15.742B backlog at December 31, 2025 that supports switching costs and revenue visibility. But the 10-K names long competitor lists in MCN, Video and Command Center, and the risk-factor diff flags faster entry by new, defense and AI competitors. FY2020-FY2025 revenue, gross profit, operating income, net income and operating cash flow all rose, with FY2025 revenue $11.68B, operating income $2.99B and operating cash flow $2.84B; the sources give no margin percentages or return-on-capital metric. U.S. government was about 8% of FY2025 sales and its contracts are cancellable at convenience, so the advantage is real but contested.
- ✓ 3. 10-Q takeaways
Q3 2026 (quarter ended 2026-10-03) sales rose 12% to $3.376B, with Products and Systems Integration +12% and Software and Services +13%; acquisitions added $211M and foreign currency $11M. Gross margin improved to 52.4%, but GAAP operating margin fell to 23.0% and GAAP EPS to $3.06 on higher other charges, including an $87M Silvus contingent earnout charge; non-GAAP operating margin was 32.5% and non-GAAP EPS $4.69. Nine-month operating cash flow was flat at $1.582B, inventory investment rose $396M, and management raised FY2026 revenue, non-GAAP EPS and operating cash flow guidance.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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