Motorola Solutions Stock has nearly doubled the S&P’s returns since 2018 – here’s why:

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Motorola Solutions Inc. (NYSE: MSI) The stock price rose 113% from $115 at the end of 2018 to approximately $245 today, mainly due to favorable changes in the P/S multiple. In addition, the company saw revenue increase during this period and revenue per share has increased despite an increase in the number of shares outstanding. In addition, the S&P 500 returned around 58% over the same period, meaning that MSI stocks have strongly outperformed the broader markets since late 2018.

In our interactive dashboard, Why Motorola Solutions Stock Moved: MSI shares are up 113% since 2018we break down the factors behind this movement.

MSI’s total revenue grew 15% from $7.3 billion in FY 2018 to $8.5 billion on an LTM basis

  • MSI’s total revenue first rose from $7.3 billion in FY ’18 to $7.9 billion in FY ’19, before falling to $7.4 billion in FY ’20 due to the pandemic.
  • However, revenues have since recovered, rising to $8.2 billion, according to the company’s most recent earnings in FY ’21. Further, revenues are currently $8.5 billion, on an LTM basis.
  • MSI derives its revenues almost equally from both products and services, with the services segment defining more of the company’s overall growth in recent years and now accounting for 44% of the company’s total revenue.
  • For more information on MSI earnings and peer comparison, see: Motorola Solutions Earnings Comparison

Revenue per share increased 12% from $45.09 in 2018 to $50.46 currently

  • MSI’s revenue increased from $7.3 billion in 2018 to $8.5 billion today, while the number of shares outstanding increased from 162.9 million in 2018 to 167.6 million currently.
  • As a result, the RPS has risen from $45.09 in FY ’18 to $50.46 currently.

Price-to-sale (P/S) multiple for MSI rose from 2.6x in FY ’18 to 5.5x in FY ’21, but has now declined to 4.8x, still more than 1.8x higher than the FY ’18 Level

  • Due to MSI’s consistent performance since the end of 2018, the P/S multiple rose steadily from 2.6x in FY ’18 to 5.5x in FY ’21.
  • However, amid the current geopolitical tensions that are dragging the broader markets down, the P/S multiple has receded and currently stands at around 4.8x.
  • For more information on the company’s EBITDA and comparison with peers, see: Motorola Solutions EBITDA Comparison:.

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