stock is quite sensitive to R&D as % of gross profit.
Over the past week, Trefis members have created forecasts for Motorola's R&D as % of gross profit and their projections suggest higher R&D expenses that could result in 5% downside to stock.
Motorola competes with
Research in Motion
in the mobile phone market.
We currently have a Trefis price estimate of around $8 for Motorola's stock, about 12% above the current market price of around $7.
Below is the chart showing recent estimates created by Trefis members for the one driver in detail.
The average of Trefis member forecasts for R&D as % of gross profit indicate a decrease from around 45% in 2010 to 29% by 2016, compared to the baseline Trefis estimate of a decrease from 44% in 2010 to 28% by the end of the Trefis forecast period.
The member estimates imply a 5% downside to the Trefis price estimate for Motorola's stock. In the past, R&D as % of gross profit increased from around 31% in 2005 to 47% in 2009.
Disagree? You can drag the forecast trend-line above to express your own view, and see the sensitivity of Motorola's stock to R&D as % of gross profit.
Our complete analysis for Motorola's stock is
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