Motorola dominates the public safety communications market with approximately 75% of sales coming from police departments, fire departments, and 911 call centers – it’s roughly ten times larger than its closest rival. The company benefits from sticky customer relationships and ongoing upgrade cycles.
The company also benefits from secular growth trends including increasing public safety spending, AI integration into communications systems, and the ongoing modernization of emergency response infrastructure.
The stock trades at 28.1 times the company’s forward earnings forecast, which seems high until you consider the strength of the company’s wide economic moat built through decades of mission-critical relationships as well as high switching costs.
MOTOROLA SOLUTIONS INC. (New York symbol MSI; www.motorolasolutions.com) makes communications equipment such as two-way radios for police and fire vehicles, as well as high-definition surveillance systems.
The company gets 60% of its revenue from selling hardware, and 40% from software and services. Its biggest single market is the U.S. at 69% of revenue, followed by the U.K. (5%) and Canada (4%). Other countries supplied the remaining 22%.
The company continues to win new contracts. For example, four U.K. fire and rescue services, which together operate 77 fire stations, now use Motorola’s Control Room Solution software to improve their response times to fires and other emergencies.
Deals like this are part of Motorola’s plan to expand its services operations. That gives it recurring revenue streams and cuts its reliance on selling hardware.
In the three months ended December 31. 2025, Motorola’s revenue rose 12.3%, to $3.38 billion from $3.01 billion. Excluding one-time items, earnings rose 6.2%, to $650 million, or $3.90 a share, from $612 million, or $3.66.
[ofie_ad]
The company’s strong balance sheet will let it keep investing in its businesses. It currently holds cash of $1.2 billion, while its long-term debt of $8.4 billion is a low 11.10% of its market cap.
Motorola’s tactical communications acquisition fuels next phase of expansion
Meanwhile, Motorola tends to fuel its growth with acquisitions. However, it cuts the risk of this strategy by focusing on smaller firms that enhance its technology and market share.
For example, it recently acquired Silvus Technologies, Inc. Based in California, that firm makes specialized communications equipment for military and law enforcement clients. Its products make it easier for users to transmit data in harsh conditions and areas without cellphone towers.
The company paid $4.4 billion. Depending on future performance, it may have to pay an additional $600 million in 2027 and 2028. Silvus will add $475 million to Motorola’s annual revenue of $11 billion.
Motorola is now adding new AI (artificial intelligence) tools to its radio systems, which should speed up emergency response times. New features like these should lift its earnings in 2026 by 8% to $16.37 a share, and the stock trades at 28.1 times that forecast.
The company also raised your quarterly dividend by 11.0% with the January 2026 payment, to $1.21 a share from $1.09. The new annual rate of $4.84 yields 1.1%.
Recommendation in Wall Street Stock Forecaster: Motorola Solutions Inc. is a buy.
