Motorola Solutions Stock: Is MSI Underperforming the Technology Sector?

With a market cap of $77.5 billion, Motorola Solutions, Inc. (MSI) is a global technology company focused on mission-critical communications, video security, and command center software. The Chicago, Illinois-based company's products and services help public safety agencies, governments, and businesses protect people, property, and places.

Companies valued at $10 billion or more are generally classified as “large-cap” stocks, and Motorola Solutions fits this criterion perfectly. Its strengths stem from its mission-critical technology, deep customer relationships, and integrated safety and security ecosystem. Its long-standing presence in public safety, government, and enterprise markets, along with a global customer base spanning more than 100 countries, provides a strong foundation for the business.

Shares of the company have pulled back 5.4% from its 52-week high of $494.85 touched on Sept. 1. The stock has fallen nearly 14% over the past three months, underperforming the State Street Technology Select Sector SPDR ETF (XLK), which gained 3.1%.

The same trend persists over the long term too. Over the past 52 weeks, shares of Motorola Solutions have fallen 2.2%, underperforming XLK’s 42.6% gain. Moreover, MSI stock has risen 22.1% on a YTD basis, trailing the technology sector’s 30.1% gain. 

The stock has been trading above both its 50-day and 200-day moving averages since the end of July, signaling a renewed upward trend and suggesting that recent gains have strengthened its technical momentum.

On Aug. 20, Motorola Solutions completed its $1.5 billion acquisition of D-Fend Solutions, strengthening its counter-drone capabilities. D-Fend’s technology uses RF cyber-takeover to safely neutralize rogue drones by taking control of them and directing them to designated landing zones, avoiding the disruption and collateral damage associated with traditional counter-drone methods. The deal also expands MSI’s mission-critical security ecosystem, with D-Fend’s technology deployed across airports, critical infrastructure, and other sensitive sites in more than 30 countries. Investors were pleased and pushed the stock up 1.4% in the next trading session. 

In the technology sector, MSI stock has significantly lagged behind its rival, Ubiquiti Inc. (UI), over the past 52 weeks, with UI shares surging 2.6%.

Despite the stock's underperformance over the past year, analysts are strongly optimistic about its prospects. MSI has a consensus rating of “Strong Buy” from the 14 analysts covering it, and the mean price target of $528.58 is a premium of 12.9% to current levels.

On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.