DCF Studio

    MSI · NYQ · Technology

    Motorola Solutions, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 268.96

    Market price

    USD 487.31

    Implied upside

    -44.8%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    Current EV/EBITDA of 26.4x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 268.96-44.8%
    Exit multiple
    USD 398.14-18.3%
    Market price
    USD 487.31

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn2bn4bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 13.0bnUSD 14.2bnUSD 15.3bnUSD 16.4bnUSD 17.5bnUSD 18.5bnUSD 19.4bnUSD 20.2bnUSD 20.9bnUSD 21.4bn+5.7%
    EBITUSD 3.0bnUSD 3.3bnUSD 3.6bnUSD 3.8bnUSD 4.1bnUSD 4.3bnUSD 4.5bnUSD 4.7bnUSD 4.8bnUSD 5.0bn+5.7%
    NOPATUSD 2.4bnUSD 2.6bnUSD 2.9bnUSD 3.1bnUSD 3.3bnUSD 3.4bnUSD 3.6bnUSD 3.8bnUSD 3.9bnUSD 4.0bn+5.7%
    Add depreciation & amortisationUSD 493.3mUSD 536.9mUSD 580.1mUSD 622.2mUSD 662.5mUSD 700.1mUSD 734.2mUSD 764.2mUSD 789.4mUSD 809.1m+5.7%
    Less capital expenditureUSD -325.5mUSD -374.4mUSD -426.3mUSD -480.6mUSD -536.6mUSD -593.3mUSD -649.8mUSD -705.1mUSD -757.9mUSD -807.3m+10.6%
    Capex, % of revenue2.5%2.6%2.8%2.9%3.1%3.2%3.4%3.5%3.6%3.8%-
    Less increase in working capitalUSD -203.7mUSD -173.9mUSD -172.4mUSD -167.9mUSD -160.4mUSD -149.8mUSD -136.2mUSD -119.6mUSD -100.3mUSD -78.7m-10.0%
    Free cashflow to firmUSD 2.4bnUSD 2.6bnUSD 2.8bnUSD 3.0bnUSD 3.2bnUSD 3.4bnUSD 3.6bnUSD 3.7bnUSD 3.8bnUSD 3.9bn+5.6%
    Discount factor0.96100.88750.81970.75700.69910.64570.59630.55070.50860.4698-
    Present valueUSD 2.3bnUSD 2.3bnUSD 2.3bnUSD 2.3bnUSD 2.3bnUSD 2.2bnUSD 2.1bnUSD 2.0bnUSD 1.9bnUSD 1.8bn-
    Present Value Of The ForecastUSD 21.6bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.912Reported 0.869, pulled toward 1.0 (Blume)
    Cost of equity8.75%Risk-free + beta x equity risk premium
    Cost of debt5.44%Risk-free + 55bp, the spread for a AA rating at 8.2x interest cover. Book interest / average debt was lower, at 4.4%.
    Market capitalisationUSD 80.6bn89.2% of capital
    Total debtUSD 9.8bn10.8% of capital, book value as a proxy
    Tax rate20.0%Effective, capped at statutory
    WACC8.28%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 268.96

    60% of EV

    Forecast FCFF, final year
    USD 3.9bn
    Capex at depreciation, working capital in reinvestment
    USD 4.3bn
    Less reinvestment at g/ROIC (9.9% of NOPAT)
    USD -425.8m
    Capitalised
    USD 3.9bn
    ROIC (reported)
    25.4%
    Terminal value, undiscounted
    USD 69.1bn
    Terminal value, discounted
    USD 32.4bn
    Enterprise value
    USD 54.1bn
    Less net debt
    USD 8.6bn
    Equity value
    USD 45.5bn

    Exit at 20.0x EBITDA

    Value per shareUSD 398.14

    72% of EV

    Terminal value, undiscounted
    USD 115.5bn
    Terminal value, discounted
    USD 54.3bn
    Enterprise value
    USD 75.9bn
    Less net debt
    USD 8.6bn
    Equity value
    USD 67.3bn

    Spread between methods: 39%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    6.28%378.57405.38439.61484.66546.36
    7.28%302.37317.65336.38359.76389.63
    8.28%248.78257.98268.96282.22298.49
    9.28%209.08214.78221.48229.40238.88
    10.28%178.51182.09186.25191.12196.85

    Outlined: this model. Green text: above today's price of 487.31. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year8.6%6.2%12.8%
    EBIT margin25.3%23.2%40.1%
    Discount rate-8.3%5.9%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.