Since Motorola completed its spin-off of its mobile phone business in January 2011, the highest price the stock has reached for the renamed Motorola Solutions Inc. (NYSE: MSI) is $72.97 in mid-November of last year. That’s an increase of more than 74% in just over five years, about 50% more than the S&P 500 index has grown in the same period.
When the spin-off occurred, everyone believed that the newly created Motorola Mobility Holdings was the jewel in the crown. Google, now Alphabet Inc. (NASDAQ: GOOGL), paid $12.5 billion for the mobile phone maker in 2012 in a move most observers believed was a deal for the 17,000 Motorola patents. Less than two years later, Google sold the phone-making business and some of the patents to Lenovo for $2.91 billion.
Motorola Solutions has built up a good business in public safety operations, and the company reported quarterly adjusted earnings per share on Monday afternoon of $1.58, up from $1.25 in the same quarter a year ago. Even better, the company projects full-year earnings per share of $4.45 to $4.65, compared with the consensus estimate of $3.87. Motorola’s first-quarter forecast calls for earnings of $0.37 to $0.42 per share on lower revenue. The current analyst consensus estimate is $0.43.
The stock traded close to its 52-week high Tuesday morning, before settling back to trade up by less than 7% at $71.30 in the early afternoon, in a 52-week range of $56.40 to $72.97. The consensus price target on the stock is $66.15, so either the company is fully valued or analysts need to take another look.