NEW YORK (TheStreet) -- Shares of Motorola Solutions (MSI) - Get Report are gaining by 6.28% to $64 at the start of trading on Wednesday morning, after the company announced it received a $1 billion investment from Silver Lake Partners.
Motorola, a global provider of mission-critical communications solutions, said it will use the investment to accelerate growth in its smart public safety solutions and services business.
"Silver Lake has a proven track record of creating value by partnering with leading technology companies around the world. This strategic partnership and investment combine Silver Lake's expertise in technology products, services and information solutions with our vision to create safer communities and more successful businesses. It represents a strong vote of confidence in our company's strategy and future growth opportunities," company CEO Greg Brown said in a statement.
As part of the deal with Silver Lake, two of its managing partners will be added to the Motorola Solutions board of directors, effective in the 2015 third quarter.
Separately, TheStreet Ratings team rates MOTOROLA SOLUTIONS INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate MOTOROLA SOLUTIONS INC (MSI) a HOLD. The primary factors that have impacted our rating are mixed-some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, growth in earnings per share and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, disappointing return on equity and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has significantly increased by 228.26% to $151.00 million when compared to the same quarter last year. In addition, MOTOROLA SOLUTIONS INC has also vastly surpassed the industry average cash flow growth rate of -22.16%.
- MOTOROLA SOLUTIONS INC has improved earnings per share by 21.2% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, MOTOROLA SOLUTIONS INC swung to a loss, reporting -$3.12 versus $3.47 in the prior year. This year, the market expects an improvement in earnings ($3.31 versus -$3.12).
- Despite the weak revenue results, MSI has outperformed against the industry average of 10.9%. Since the same quarter one year prior, revenues slightly dropped by 0.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Communications Equipment industry and the overall market, MOTOROLA SOLUTIONS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Communications Equipment industry. The net income has significantly decreased by 41.7% when compared to the same quarter one year ago, falling from $127.00 million to $74.00 million.
- You can view the full analysis from the report here: MSI Ratings Report