Yahoo Finance Is Motorola (MSI) a Good Investment Bet Ahead of Q1 Earnings?
Motorola Solutions, Inc.'s MSI shares have witnessed a steady uptrend since November 2023, barring minor hiccups, driven by improved market demand across its portfolio on the back of a flexible business model and solid cash flow.
As a leading provider of mission-critical communication products and services worldwide, Motorola has a steady revenue stream from this niche market. The communications equipment maker intends to boost its position in the public safety domain by entering into strategic alliances with other players in the ecosystem.
It remains poised to benefit from a holistic growth focus with healthy organic growth and opportune acquisition initiatives, backed by disciplined capital deployment. Its competitive position and an attractive portfolio for a large addressable market augur well for long-term growth.
During the first quarter, Motorola inked a multi-year agreement with Google Cloud to address public safety and enterprise security issues. With the help of Google Cloud’s robust infrastructure, Motorola aims to address the increasing demand for cloud security solutions in real-time scenarios. The company will focus on providing leveraged capabilities across its rapidly growing cloud security solutions, including Avigilon Alta, which specializes in video surveillance and security solutions for enterprises, irrespective of their size of operations. This is expected to give Motorola a competitive edge to meet the increased demand for innovative and integrated security solutions.
The partnership aims to ensure scalability and flexibility in deploying safety and security solutions to meet the needs of various organizations. Moreover, the strategic collaboration with a tech giant like Google is expected to generate a steady income for MSI and potentially open new revenue streams in the long run. Motorola is likely to ink similar contracts in the future to strengthen its position in the wireless equipment sector by elevating its technological capabilities and reliability.
Motorola is scheduled to report first-quarter 2024 results on May 2, after the closing bell. The company pulled off a trailing four-quarter earnings surprise of 6.6%, on average, beating the earnings estimates on each occasion.
The Chicago, IL-based company is expected to have recorded year-over-year higher revenues in the first quarter on the back of growth in both segments — Products and Systems Integration and Services and Software. It benefits from the increasing demand for its mission-critical technologies in North America and globally.
The Zacks Consensus Estimate for total revenues for the company stands at $2,344 million. It generated revenues of $2,171 million in the prior-year quarter. The consensus mark for earnings is currently pegged at $2.52 per share, indicating growth from $2.22 in the year-earlier quarter.
Motorola expects to record strong demand across video security and services, land mobile radio products and related software while benefiting from a solid foundation. These systems drive the demand for additional device sales and promote software upgrades and infrastructure expansion. The comprehensive suite of services ensures continuity and reduces risks related to critical communications operations.
The Zacks Consensus Estimate for the Products and Systems Integration segment’s revenues is pegged at $1,406 million. The figure indicates a rise from $1,303 million recorded in the year-ago quarter. Our estimates for revenues from this segment stand at $1,416, implying 8.7% year-over-year growth. The Zacks Consensus Estimate for the Services and Software segment’s revenues is pegged at $941 million, up from $868 million recorded in the year-earlier quarter. Our estimate for revenues from this segment stands at $926, suggesting 6.7% year-over-year growth.
Motorola has a VGM Score of B. The stock is up 18% over the past year compared with the industry’s rise of 21%. With solid fundamentals and healthy revenue-generating potential driven by robust demand trends, it appears to be a prudent investment proposition and a long-term stock to have in your portfolio.
Stocks to Consider
Here are some companies you may want to consider, as our Earnings ESP model shows that these have the right combination of elements to post an earnings beat this season:
United States Cellular Corporation USM is set to release quarterly numbers on May 3. It has an Earnings ESP of +36.36% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for Silicon Motion Technology Corporation SIMO is +5.96% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on May 2.
The Earnings ESP for Altice USA, Inc. ATUS is +358.33% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on May 2.
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United States Cellular Corporation (USM) : Free Stock Analysis Report
Motorola Solutions, Inc. (MSI) : Free Stock Analysis Report
Silicon Motion Technology Corporation (SIMO) : Free Stock Analysis Report
Altice USA, Inc. (ATUS) : Free Stock Analysis Report
