Shares of Motorola Solutions, Inc. (MSI - Free Report) surged 60.3% since the beginning of 2019 till mid-February 2020, making it one of the best performers in the Zacks Wireless Equipment industry. However, it took a beating following the coronavirus pandemic, which wreaked havoc beyond its country of origin with the stock jumping 44% for the period from January 2019 to February 2020 end compared with the industry’s rise of 9.7% and the S&P 500 Index’s gain of 17%. This Zacks Rank #2 (Buy) stock appears to be a solid investment option for investors in the long run with healthy fundamentals. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Motorola is a premier communications equipment manufacturer and has strong market positions in bar code scanning, wireless infrastructure gear and government communications sector. As a leading provider of mission-critical communication products and services worldwide, the company generates steady revenues 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.
The company expects to gain from robust organic growth, disciplined capital deployment and a favorable global macroeconomic environment. Furthermore, its competitive position and attractive portfolio for large addressable markets and healthy balance sheet augur well for future growth.
Motorola has embraced AI-powered facial recognition technology with the launch of Avigilon Control Center (ACC) 7.4 software for an easy-to-use AI-enabled user interface for enhanced safety measures in commercial enterprises. This newest version of video management software requires no physical interaction by the end user, and is very fast.
The company aims to capitalize on the increasing popularity of this technology to better secure commercial organizations with ‘appearance alert’ capability. The ACC software and connected Avigilon cameras seek to identify potential threats based on facial recognition technology to set alerts for security personnel for appropriate actions. This enables a more pro-active approach for perceived threat detection for better decision-making process. Motorola deems this ‘human in the loop’ approach as the cornerstone of its AI-enabled capabilities for effective compliance control mechanism.
Performance & Trend in Earnings Estimate Revisions
The stock has long-term earnings growth expectation of 8.5%. It delivered positive earnings surprise of 6.6%, on average, in the trailing four quarters, beating estimates on each occasion. Earnings estimates for the current fiscal have moved up 3.9% to $8.75 per share over the past year, while that for the next fiscal is up 4.3% to $9.65. The stock has a VGM Score of B, signifying solid inherent potential.
What Does RSI Indicate?
RSI or ‘Relative Strength Index’ is a popular technical indicator. It compares average of gains in days that closed up to the average of losses in days that closed down. Readings above 70 suggest an asset is overvalued, while that below 30 indicates undervalued conditions.
Motorola has an RSI reading of 29.29, which suggests it is now in the undervalued territory, making it a solid investment candidate.
Other Key Picks
Other top-ranked stocks in the industry include Qualcomm Incorporated (QCOM - Free Report) , PCTEL, Inc. (PCTI - Free Report) and SeaChange International, Inc. (SEAC - Free Report) , each carrying a Zacks Rank #2.
Qualcomm has long-term earnings growth expectation of 19.5%. It delivered positive earnings surprise of 10%, on average, in the trailing four quarters, beating estimates on each occasion.
PCTEL surpassed earnings estimates on each occasion in the trailing four quarters, the positive surprise being 150.6%, on average.
SeaChange International has long-term earnings growth expectation of 10%.
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