Motorola Solutions Stock Lost 7.9%, Buy Or Wait?

Motorola Solutions (MSI) stock is down 7.9% in 21 trading days. The stock looks fairly priced at the moment, though history suggests you may benefit from buying dips. Consider the following data:

• Size: Motorola Solutions is a $73 Bil company with $11 Bil in revenue currently trading at $438.94.
• Fundamentals: Last 12 month revenue growth of 6.4% and operating margin of 25.1%.
• Liquidity: Has Debt to Equity ratio of 0.11 and Cash to Assets ratio of 0.2
• Valuation: Motorola Solutions stock is currently trading at P/E multiple of 34.6 and P/EBIT multiple of 24.4
• Has returned (median) 40.3% within a year following sharp dips since 2010. See MSI Dip Buy Analysis.

While we like to buy dips if the fundamentals check out – for MSI, see Buy or Sell MSI Stock – we are wary of falling knives. Specifically, it is worth trying to answer if things get really bad, and MSI drops another 20-30% to $307 levels, will we be able to hold on to the stock? What is the worst case scenario? We call it downturn resilience. Turns out, the stock saw an impact slightly worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

MSI stock has fallen meaningfully recently and we currently find it fairly priced. This may feel like a caution, and there is significant risk in relying on a single stock. However, there is a huge value to a broader diversified approach we take with Trefis High Quality Portfolio. We go beyond just equities. Is a portfolio of 10% commodities, 10% gold, and 2% crypto in addition to equities and bonds – likely to return more during the next 1-3 years, and protect you better if markets crash 20%? We have crunched the numbers.

Below are the details, but before that, as a quick background: MSI provides mission-critical communications, analytics, land mobile radio systems, video security, and access control solutions across products, systems integration, software, and services segments.

2022 Inflation Shock

• MSI stock fell 27.8% from a high of $272.73 on 29 December 2021 to $197.00 on 16 June 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 27 March 2023
• Since then, the stock increased to a high of $504.60 on 10 November 2024 , and currently trades at $438.94

2020 Covid Pandemic

• MSI stock fell 33.1% from a high of $186.12 on 19 February 2020 to $124.56 on 23 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 26 March 2021

2018 Correction

• MSI stock fell 18.6% from a high of $133.79 on 3 December 2018 to $108.97 on 24 December 2018 vs. a peak-to-trough decline of 19.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 8 February 2019

2008 Global Financial Crisis

• MSI stock fell 84.9% from a high of $143.99 on 3 January 2007 to $21.70 on 6 March 2009 vs. a peak-to-trough decline of 56.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 16 April 2019

Worried that MSI could fall much more? You could take a look at the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.